Gifting The Family Home – An IHT Trap
It is not uncommon for individuals to give away their family home. For example, an elderly widow moving into nursing care may be in the fortunate position of being able to make a lifetime gift of her residence to her adult daughter. This article focuses on a potential inheritance tax (IHT) anti-avoidance pitfall in the […]
Don’t Let HMRC Reject You!
Tax returns can be difficult and complicated. Mistakes often happen when completing returns. Can HM Revenue and Customs (HMRC) reject an incomplete or incorrect tax return, send it back to the taxpayer for correction and treat it as never having been received, possibly resulting in late filing penalties? HMRC seem to think so. However, that […]
Loans To Traders: They Think It’s All Over…
An individual who makes a loan to a company they own will probably expect to obtain tax relief if the loan subsequently has to be written off. Capital gains tax relief on the loan write-off is potentially available if certain conditions are satisfied. One such condition is that the loan has become irrecoverable. This might […]
An Inheritance Tax-Free Rental Property Business?
Many individuals would like to have a rental property business, but may be concerned (among other things) about the possible eventual inheritance tax (IHT) liability on the value of the property portfolio. However, a valuable IHT relief may be available to alleviate the problem in certain circumstances. Business property relief (BPR) applies to various types […]
Penalties For Tax Return Errors – All Is Not Lost!
The penalty rules for errors in tax returns etc potentially apply if a tax return contains an inaccuracy that results in a tax liability being understated. In addition, a penalty can apply if an error gives rise to a false or inflated loss (FA 2007, Sch 24, para 1). Errors involving losses The amount of […]
Spouses’ Wages – Legitimate Expense Or Tax Dodge?
A common element in the accounts of many self-employed individuals (and partnerships) is a deduction for the wages of family members, particularly a spouse (or civil partner). For example, in over 30 years as a tax practitioner I have seen countless claims for ‘wife’s wages’. Most claims for deductions of this nature are valid and […]
Share Disposals And Anti-Avoidance – Decisions, Decisions!
When an individual shareholder sells shares in a ‘close’ family or owner-managed trading company, he or she will probably expect the proceeds to be treated as a capital receipt. If the individual is liable to capital gains tax (CGT) on the share sale, in many cases the tax rate will be 20% (for 2018/19), although […]
Dilapidation Receipts – Income or Capital?
Some tenants treat the residential property they rent with great care. Unfortunately, others do not, and the landlord may receive dilapidation payments from the tenant to enable the landlord to restore the property to its former condition at the end of a tenancy. The question arises whether such a dilapidation payment should be treated as […]
Dilapidation Receipts – Income or Capital?
Some tenants treat the residential property they rent with great care. Unfortunately, others do not, and the landlord may receive dilapidation payments from the tenant to enable the landlord to restore the property to its former condition at the end of a tenancy. The question arises whether such a dilapidation payment should be treated as […]