Child’s income: Or is it?

Parents sometimes wish to gift income-bearing assets (e.g. company shares) directly to their unmarried minor children, to take advantage of the child’s personal allowance (and dividend allowance) and possibly also their basic rate income tax band, to reduce the family’s overall tax burden on dividend payments. Unfortunately, this tax planning idea is generally blocked by […]

Selling your company? How dare you!

A targeted anti-avoidance rule (TAAR) was introduced (from 6 April 2016) to prevent ‘phoenixism’. In broad terms, this practice involves company owners winding up their ‘old’ companies and extracting profit reserves as capital (instead of income) and repeating the exercise in one or more successive businesses. The effect of the TAAR applying is that an […]

Business property relief: Traps to avoid

Many business owners will be aware of business property relief (BPR) for inheritance tax (IHT) purposes, and some might assume that the value of their business interest will be sheltered from IHT by BPR. However, BPR (at the rate of 100% or 50%) is subject to various conditions and restrictions. This article outlines a selection […]

‘Good’ or ‘bad’ tax advice?

HM Revenue and Customs (HMRC) will generally seek to impose penalties on taxpayers who (for example) have made tax return errors resulting in their tax liabilities being understated. However, it is important to note that HMRC cannot impose penalties for errors despite the taxpayer having taken reasonable care. Unfortunately, the tax legislation does not define […]

Are You Winding Me Up?

When HM Revenue and Customs (HMRC) encounters an arrangement that it regards as tax avoidance (or ‘unacceptable’ tax planning), the government will often seek to block it by introducing targeted anti-avoidance legislation. Rising from the ashes? For example, a targeted anti-avoidance rule (TAAR) was introduced (in Finance Act 2016) to prevent ‘phoenixism’. In very broad […]

Are You Winding Me Up?

When HM Revenue and Customs (HMRC) encounters an arrangement that it regards as tax avoidance (or ‘unacceptable’ tax planning), the government will often seek to block it by introducing targeted anti-avoidance legislation. Rising from the ashes? For example, a targeted anti-avoidance rule (TAAR) was introduced (in Finance Act 2016) to prevent ‘phoenixism’. In very broad […]