Sale of goodwill: income or capital?
It is common in many occupations and professions (e.g. law, medicine) for individuals to be engaged as self-employed consultants. Some consultants will build up their own practices before eventually selling them. From a tax perspective, the question arises how the practice disposal proceeds should be treated. For example, is it an income or capital receipt? […]
No suspicion needed!
Where a taxpayer is unfortunate enough to be subjected to an enquiry into their tax return, it is not uncommon for HM Revenue and Customs (HMRC) to issue a formal notice requiring the taxpayer to provide information or produce documents which HMRC considers is ‘reasonably required’ to check the return (FA 2008, Sch 36, para […]
It’s the quality not the quantity!
A change in personal circumstances can have tax implications, such as affecting the availability of capital gains tax principal private residence (PPR) relief. For example, a house might be occupied for only a short time before sale, due to a change of plans following a relationship breakdown. ‘Safe’ occupation? A common question asked by house […]
Penalties: Don’t take too long!
The penalty regime for errors in tax returns etc. (FA 2007, Sch 24) provides an escape from penalties if an error has arisen despite ‘reasonable care’ having been taken. Otherwise, the maximum penalty (i.e. 30% to 100% of ‘potential lost revenue’; or possibly higher if the error involves an offshore matter) depends on the type […]
Business loan write-offs: Not all bad news?
It is fairly common for a business owner to lend money to their own business, or possibly a business owned by a family member, to fund the operation of the business. Unfortunately, the business will sometimes be unsuccessful and the loan may become irrecoverable, resulting in it being written off. Tax relief may be available […]
Property tax deductions: Don’t miss out!
Capital gains tax (CGT) relief is generally available on the disposal of property in respect of improvements etc., for ‘the amount of any expenditure wholly and exclusively incurred on the asset by him or on his behalf for the purpose of enhancing the value of the assets, being expenditure reflected in the state or nature […]
Entrepreneurs’ relief: Nothing ‘personal’
A tightening of conditions for capital gains tax (CGT) entrepreneurs’ relief (ER) in Finance Act 2019 may have resulted in some taxpayers no longer qualifying for the relief. Personal company For example, an individual disposing of shares in a company is eligible to claim ER if throughout two years (increased from one year, for disposals […]
Information notices: ‘Fishing’ allowed?
Taxpayers understandably do not generally relish contact with HM Revenue and Customs (HMRC), such as receiving requests for information and/or documents in respect of an individual’s tax affairs. The natural instinct of some taxpayers is to resist such requests, or alternatively to provide only the details that the taxpayer considers HMRC should be entitled to […]
IHT exemption – No waiting required!
When it comes to tax reliefs and exemptions, one of the most generous is the inheritance tax (IHT) exemption for ‘normal expenditure out of income’. This is because the exemption is only limited broadly by an individual’s personal circumstances and the amount of surplus income available to give away. Satisfying the conditions The IHT exemption […]