Enter Your E-mail

The LITRG raises issues about a tax change that could increase the costs for disabled people of changing their motor vehicle, preventing many from changing to a more suitable one. Introduction From 1 April 2017, the Government will restrict the availability of zero-rate VAT for the purchase of adapted motor vehicles for eligible disabled users to one car every three years. It says there has been abuse of this relief in the past, with some people purchasing numerous adapted vehicles in a single ... Continue Reading

LITRG has questioned the fairness of a government proposal to increase the amount of tax charged to people living in the UK who receive pensions from overseas. Background Where a pension is paid to a person who is resident in the UK, by or on behalf of a person who is outside the UK, only 90 per cent of the income arising to that recipient in the tax year is liable to tax (called the ‘90 per cent rule’). The Government says it is fairer to pensioners with UK only pension income if this ... Continue Reading

LITRG is urging taxpayers who miss the Self-Assessment filing deadline on Tuesday (31 January), but who have a reasonable excuse for the delay, to appeal against penalties for late filing. Introduction The Low Incomes Tax Reform Group (LITRG) supports HMRC’s efforts to encourage people to file returns and pay tax due from them by the proper date. But the campaign group is concerned that some of those who do not make the deadline may not appeal against sanctions for late filing because they ... Continue Reading

Do you want to know more about HMRC’s online – or ‘digital’ – services but need help to understand how to use them? LITRG’s new guide may be just what you need. Introduction You may also have heard of the Government Gateway or GOV.UK Verify, but not really understood what they are. With government moving more and more essential services and information online, it is vital that people who want to use these services know how to access them and how to get help to ... Continue Reading

The beneficiary of a trust can live in a property held within a trust as their main residence and on the future disposal of the property Principal Private Residence (PPR) relief will be available. However, if a ‘hold-over’ election was made on transfer into the trust PPR is denied on any subsequent sale. This is the position whether the trust sells the property or the property is transferred out of the trust and then the transferee sells. Therefore, the choice is between: paying capital ... Continue Reading

When deciding whether a property should be given Principal Private Residence (PPR) status HMRC will look at whether the owner had any intention of living in the property. It is a matter of fact whether a property is the PPR or not but to allow a PPR claim HMRC will require proof that the property has actually been lived in as the PPR. In Metcalf v HMRC (2010), lack of both oral and other evidence, including lack of consumption of electricity helped the Tribunal find in favour of HMRC.Proving PPR ... Continue Reading

How does it work? The ‘Discretionary’ trust is created on the first spouse/civil partner’s death by placing his or her share of the property into the trust. At the trustees’ discretion the loan monies are given to the remaining spouse/civil partner as beneficiary. The loan is kept by the trustees as a debt of the estate until ‘called in’ on the death of the second spouse. The surviving spouse will normally have no personal liability for the charge which can ... Continue Reading

The vast majority of UK properties are privately owned by individuals, many having been purchased as an investment rather than as a main residence. The private investor landlord is taxed on the amount of letting income received less allowable expenses incurred on a fiscal year basis, as well as any capital gain that may be made on sale. Inheritance tax may be payable on the value of the property held at the date of death.Individuals who purchase property jointly intending to rent for the long term ... Continue Reading

A higher rate taxpayer who is the owner of more than one property can still benefit from the use of the lower rates of corporation tax in a situation where a company is created but the properties remain in the name of the taxpayer. A set amount is paid as a management charge from the rental income received by the taxpayer to the company for the service role of managing the property business. The management/service charge is thus a fully allowable expense against the rental income received. The management ... Continue Reading

Overpayments of tax credits occur when you receive more than you are entitled to for a tax year. LITRG have issued an updated guide to dealing with them. Introduction Sometimes overpayments happen because of the design of the system, or they can happen because you or HMRC have made a mistake. Guidance to help The Low Incomes Tax Reform Group (LITRG) has issued an updated guide, published in conjunction with Advicenow, which explains how to find out more about your overpayment and how to challenge ... Continue Reading