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Julie Butler looks at the special tax rules for Furnished Holiday Lettings and how they are changing. Introduction There has been much written about Furnished Holiday Lets (FHLs) and the plethora of rule changes and the impact this will have in practice. The real worry for the taxpayer is if the new rule of 105 days actually letting out the property (the “letting condition”) is not achieved and what action should be taken. The letting condition comes into force from 6 April ... Continue Reading

Malcolm Finney, author of 'Personal Tax Planning: Principles and Practice' highlights a potential pitfall in respect of 'settlor-interested' trusts for Capital Gains Tax purposes. Care is required where a trust is ‘settlor-interested’. Gifts made on or after 10  December 2003 into a settlor-interested trust do not qualify for hold-over relief either under TCGA 1992 s 260 or s 165. However, transfers out of such trusts may still qualify for hold-over relief. A trust is ‘settlor-interested’ ... Continue Reading

HM Revenue & Customs has announced the creation of a new department which will focus specifically on UK taxpayers who have hidden money in offshore accounts. The department will co-ordinate use of the increasing volume of data which HMRC is receiving in relation to UK taxpayers' offshore activities. One of their first tasks will be to deal with the 6,000 HSBC Geneva account holders whose details were stolen and passed to the UK tax authorities (see Is HMRC Profiting from the Proceeds of ... Continue Reading

HM Revenue & Customs has updated its VAT Notice 700/65 Business Entertainment to take account of changes in the rules relating to entertaining overseas customers. This has proved necessary in light of the ECJ ruling in the case of Danfoss and AstraZeneca (Case-371/07), wherein the ECJ found fault with HMRC's previous position of rejecting any VAT claim for business entertaining in any circumstances. The guidance does its best to limit the scope of any possible reclaim, as did the preceding ... Continue Reading

Simon York, HMRC’s Deputy Director Individuals and Public Bodies, discusses the new teams set up to tackle tax avoidance and evasion by wealthy individuals. In this difficult economic climate it is vital that everyone pays their fair share of taxes. Here at HM Revenue & Customs (HMRC) we are committed to making sure that they do. One area we are focusing our efforts on is targeting evasion and avoidance by “affluent” individuals – broadly those with income over ... Continue Reading

Sarah Bradford looks at the tax treatment of certain deposits landlords commonly take from tenants, for Property Tax Insider. Deposits from Tenants It is common practice for a landlord to take a deposit from a tenant when letting a property to cover the cost of any damage caused to the property by the tenant. A deposit of this nature may be referred to as a security deposit, a damage deposit or a rental deposit. The landlord may also ask for a holding deposit in return for taking the ... Continue Reading

Jonathan Schwarz, author of 'Booth & Schwarz: Residence, Domicile and UK Taxation, looks at the concept of deemed domicile for Inheritance Tax purposes. Introduction In introducing the Capital Transfer Tax (which has now been renamed ‘Inheritance Tax’), the Finance Act 1975 s 45 provided that, under any of three sets of circumstances a person who was not domiciled in the UK under the common law rules described in this chapter was nevertheless to be treated as domiciled in ... Continue Reading

Mark McLaughlin is concerned that HM Revenue & Customs finds it too easy to open a "Discovery Assessment" into a tax return when it would otherwise be too late - even when the taxpayer has provided plenty of information. Introduction Many taxpayers and agents take the precaution of including as much additional information as possible when filing tax returns, with a view to reducing the possibility of HM Revenue and Customs (HMRC) making a "discovery" assessment outside the normal time ... Continue Reading

HM Revenue & Customs has failed to gauge taxpayers' costs in forcing them to file their tax returns online, according to the National Audit Office. As part of its ongoing and wide-ranging audit of HM Revenue & Customs, (HMRC), the National Audit Office (NAO) has issued a report on HMRC's progress in 'encouraging' taxpayers to file returns online, instead of using paper forms - see The Expansion of Online Filing of Tax Returns. It must be said that the NAO's report is positive in the main: "HMRC’s ... Continue Reading

Following our news article last week that the UK government had announced that the Low Value Consignment Relief which allowed the VAT-free import of goods to the UK would be abolished - but only for the Channel Islands - (Government Announces Abolition of VAT-Free Imports from the Channel Islands) - the Islands' governments and retailers have responded that they will fight the new measure. Guernsey’s Chief Minister is reportedly concerned that the new policy "fails to differentiate between ... Continue Reading