Company Purchase Of Own Shares: Exit With Care!
A company purchase of own shares (CPOS) can be a useful ‘exit’ strategy for shareholders in the right circumstances. This article looks at the purchase by an unquoted trading company of its own shares from an individual shareholder of a family or owner-managed company. As a general rule, when the company buys back its own […]
Company Purchase Of Own Shares: Exit With Care!
A company purchase of own shares (CPOS) can be a useful ‘exit’ strategy for shareholders in the right circumstances. This article looks at the purchase by an unquoted trading company of its own shares from an individual shareholder of a family or owner-managed company. As a general rule, when the company buys back its own […]
Private Residence Relief: HMRC’s ‘Off-Plan’ Arguments Off Target!
A private residence relief case involving an individual’s delay moving into a dwelling whilst it was being built. The extent to which capital gains tax (CGT) principal private residence (PPR) relief is available on the disposal of an individual’s only or main residence is straightforward to establish in most cases. However, differences in interpreting the […]
Private Residence Relief: When ‘Quality Trumped Quantity’!
Most individuals who dispose of their dwelling-house expect that any capital gain will be subject to private residence relief. Many of them are correct, but unfortunately some are left disappointed. Private residence relief broadly applies to gains accruing to individuals on the disposal of (or of an interest in) all or part of a dwelling […]
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 […]
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 […]
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 […]
Private Residence Relief: Tables Turned On HMRC!
Individuals who dispose of a dwelling house sometimes find themselves in disputes with HM Revenue and Customs (HMRC) over whether private residence relief (PRR) is due on the disposal of the property for capital gains tax (CGT) purposes (under TCGA 1992, s 222). Numerous cases have reached the courts and tribunal over the years. Burden […]
Incorporation: A Borrowing Trap
Many landlords introduce properties into their rental businesses, which may have already been held for some time (e.g. gifted or inherited property). Those landlords are, in effect, introducing capital into the business, broadly equal to the market value of the property when it was introduced, less any outstanding mortgage, etc. Allowable borrowings HM Revenue and […]