Not clear! ‘Business’ and incorporation relief
The UK tax system is extremely complex. The tax legislation is voluminous and almost impenetrable in parts. There are many ‘grey areas’ resulting in uncertainty for taxpayers and professional advisers. Is that ‘clear’? Fortunately, HM Revenue and Customs (HMRC) is required by law to provide taxpayers with the facility to apply for clearance on the […]
Whose income is it anyway?
Married couples (and civil partners) often own assets such as investment properties in joint names. For income tax purposes, those individuals are generally treated as beneficially entitled to income from the investment property in equal shares. 50:50 or not? This ‘50:50’ rule applies while the couple are living together. There are various exceptions to the […]
IHT on death: An unfortunate tale
When someone dies, family members or friends may have the responsibility of dealing with the deceased’s estate. This may involve (among other things) applying for a grant of representation (in England and Wales), reporting the value of the deceased’s estate, and paying any inheritance tax (IHT) liability. Important responsibilities There is a lot of information […]
What’s your business really worth?
Business property relief (BPR) is a valuable inheritance tax (IHT) relief. The rates of BPR are 100% or 50%, depending on the type of relevant business property. For example, BPR at 100% can potentially shelter the value of an individual’s business from IHT on the owner’s death, if certain conditions are satisfied. For BPR purposes, […]
What’s your business really worth?
Business property relief (BPR) is a valuable inheritance tax (IHT) relief. The rates of BPR are 100% or 50%, depending on the type of relevant business property. For example, BPR at 100% can potentially shelter the value of an individual’s business from IHT on the owner’s death, if certain conditions are satisfied. For BPR purposes, […]
Writing off directors’ loans: Taxing times!
Director’s loan accounts (DLAs) are a common feature in the financial statements of family and owner-managed companies in particular. HM Revenue and Customs (HMRC) is keen to ensure that DLAs are treated correctly for tax and National Insurance contributions (NICs) purposes, and regard DLAs as a ‘risk’ in terms of potential errors. Such is HMRC’s […]
Making HMRC prove it!
The imposition of penalties by HM Revenue and Customs (HMRC) for non-compliance with statutory obligations such as filing tax returns or paying tax unfortunately seems to be becoming an increasingly common occurrence. It would be understandable to assume that HMRC’s systems and procedures satisfy the requirements for (say) the issue of valid penalty notices when […]
Do you really have HMRC’s agreement?
‘Get it in writing’ is common advice where (say) two parties are seeking a legally binding agreement. Contract settlements For example, this can apply when an individual taxpayer is trying to finalise their tax position with HM Revenue and Customs (HMRC) following a tax return enquiry. The taxpayer and HMRC may agree to a ‘contract […]