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Matthew Hutton MA, CTA (fellow), AIIT, TEP, Presenter of Monthly Tax Review, highlights a selection of practical issues, involving Deeds of Variation, dispositions for IHT purposes, and excluded property trusts. 1. Deeds of Variation: Myth That They Vary a WillContextA deed of variation is a deed of gift. It does not vary a Will. Assuming compliance with IHTA 1984 s142(2) and TCGA 1992 s62(7) such a deed is taxed as if it has varied the Will for IHT and (limited) CGT purposes. Ensure that the donor ... Continue Reading

The national minimum wage for adults is to rise to £5.80 an hour from October 2009.The government has accepted the Low Pay Commission’s recommendation of a 7 pence increase from £5.73 to £5.80 from October 2009.Other hourly rates are also to rise. The rate for 18 to 21-year-olds will increase from £4.77 to £4.83, while for 16 and 17-year-olds the rate will go up to £3.57 an hour from £3.53.In addition to the rate changes that will come into effect this year, the government has said that, ... Continue Reading

TaxationWeb has been following an appeal made to HMRC by tax barrister Keith Gordon, MA (Oxon) FCA CTA (Fellow). The appeal is made under Finance Act 2008, Schedule 36, against the 'service company' question on the 2009-10 self assessment tax return.You can view Keith's appeal letter to HMRC here. Keith has now recevied a response from HMRC and has commented as follows:"On day 30, HMRC's appeals and reviews unit has confirmed that they do not view the question as forming a Schedule 36 information ... Continue Reading

HMRC have published Brief 30/09, in which they examine allowable deductions for shares acquired before 10 April 2003 by exercising employee share options.For capital gains tax (CGT) purposes, the grant or acquisition of an option and the transaction entered into on the exercise of that option are treated as a single transaction. That single transaction is the acquisition or disposal of the asset transferred when the option is exercised (TCGA 1992, s. 144).Where shares were acquired on the exercise ... Continue Reading

HMRC have launched a new teaching resource for secondary schools - Tax Matters.The free, online interactive resource includes videos, quizzes and games, as well as key facts and figures, to help young people learn about tax and its role in society.The new materials are primarily aimed at education professionals who teach Personal, Social, Health and Economic education (PSHE) and citizenship to pupils aged between 11 and 19. They are also designed to be used by charities and voluntary organisations ... Continue Reading

Christian Ward describes an investment and trust strategy with potential IHT efficiency. Introduction to Flexible Reversionary TrustsThe perfect inheritance tax (IHT) planning solution for most people is one which can provide the IHT saving of an outright gift, whilst still allowing the donor unconditional access to their capital and any income. This is the classic objective of wanting to ‘have your cake and eat it’. No solution actually allows you to achieve this; rather certain compromises ... Continue Reading

Matthew Hutton MA, CTA (fellow), AIIT, TEP highlights an important distinction between leases and licences in the context of Agricultural Property Relief for Inheritance Tax purposes.  Context The main distinction between leases (which confer exclusive possession on the lessee) and licences (which are a personal right to the licensee) is a familiar one.  It is important in the context of Agricultural Property Relief (APR). If the landowner occupies his house only qua landlord and not qua farmer, ... Continue Reading

Andrew Needham of VAT Advisers Ltd highlights a further selection of recent VAT case decisionsTribunal says taxpayer's supplies did not qualify as exempt examination servicesThe issue was whether specific supplies of services (i.e., the 'E - Marking Service') made by the Appellant to the local examination syndicate (‘the syndicate’) of a top university were exempt from VAT, on the basis that the syndicate is an eligible body within the meaning of VAT Act 1994 Sch 9 Group 6 Item 3(a) Note 4. The ... Continue Reading

Bar and restaurant workers have been given a helping hand by the Court of Appeal in their fight for fair pay. The Court of Appeal has ruled in HMRC's favour by upholding current national minimum wage (NMW) legislation relating to tips, gratuities and discretionary service charges in the case of Annabel's restaurant and night club and others.In June 2008 HMRC won an Employment Appeal Tribunal against the restaurant/club Annabel's and others. The case involved the calculation of NMW pay where an ... Continue Reading

The Chartered Institute of Taxation (CIOT) has issued a response to the 'naming and shaming' of tax defaulters as laid out in the Finance Bill 2009.The CIOT has said that the idea of 'naming and shaming' deliberate tax defaulters (Budget Note 63) is in many ways hard to argue with as a route to helping improve attitudes towards tax compliance. It is a route that has been followed in other countries, notably Ireland.John Whiting, Chairman of the CIOT's Management of Taxes Sub-Committee, said: "The ... Continue Reading