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TaxationWeb by James BaileyFormer Tax Inspector James Bailey considers a common question asked by property investors.The question I am most often asked as a tax consultant is probably “Should I use a company when investing in property?” This question needs some background and does not make good written sense to stand on its own. Unfortunately, there is no simple answer because so much depends on your circumstances and your plans for the future. Rates of TaxLet’s start with the basics. A company ... Continue Reading

Capital Tax Review by Matthew Hutton, MA, CTA (Fellow), AIIT, TEPMatthew Hutton MA, CTA (fellow), AIIT, TEP author of Capital Tax Review, highlights points on CGT negligible value claims and the IHT spouse exemption.1. Form CG34 – Post-Transaction Valuation Checks and Negligible Value ClaimsContextHMRC offer a free valuation service to help taxpayers complete the CGT details of their tax returns. The taxpayer can ask HMRC to check valuations after he has made a disposal of a chargeable asset but ... Continue Reading

TaxationWeb by Debbie BrayDebbie Bray of LexisNexis Tolley Tax Training outlines the tax treatment of gifts.Tax examiners live in a different world to you and me. A fictitious world where clients are extremely generous folk who regularly give shares in their businesses to their family, antique vases to their grandchildren, cash to discretionary trusts, and gift aid donations to charities. This article will therefore examine the subject of gifts by establishing a few basic principles – a decent ... Continue Reading

Capital Tax Review by Matthew Hutton, MA, CTA (Fellow), AIIT, TEPMatthew Hutton MA, CTA (fellow), AIIT, TEP author of Capital Tax Review, comments on recent HMRC guidance, and its effect on future trust management expenses claims.ContextFollowing the first draft of HMRC’s paper issued in September 2004 and the revised version in June 2005, a final paper has now been released (see CTR Issue 11 (Summer 2005) Item 21). It is to be applied to 2005/06 and subsequent returns of income for trustees of ... Continue Reading

Busy Practitioner by Mark McLaughlin CTA (Fellow) ATT TEPMark McLaughlin CTA (Fellow) ATT TEP, General Editor of TaxationWeb, highlights anti-avoidance tests in connection with ‘share for share’ exchanges.Share transactions invariably have tax consequences, which often influence the structure of share deals. Tax relief provisions and anti-avoidance rules therefore need to be considered in advance. HMRC will not normally comment on tax planning (e.g. whether a certain tax relief applies in a particular ... Continue Reading

VAT Voice by Andrew NeedhamAndrew Needham, Director of VAT Solutions (UK) Ltd, comments on a Court decision regarding the deduction of input VAT on a car used exclusively for business purposes.The Court of Appeal (CoA) has dismissed HMRC's appeal in a case concerning whether a company is entitled to deduct VAT on a Mercedes car that had been purchased exclusively for business use and is not available for the private use of any person. BackgroundThe taxpayer is a private company with one director, ... Continue Reading

Tolley's Practical Tax by Louise Pinfold CTA (Fellow)Louise Pinfold explores the Planning Gain Supplement.The Barker review of housing supply, published in March 2004, indicated the need for additional housing to support a growing population, and identified an inadequate supply of development land as being the main constraint on the delivery of such additional housing. One of the detailed recommendations made was that tax measures could be used: ‘to share in windfall development gains accruing ... Continue Reading

Capital Tax Review by Matthew Hutton, MA, CTA (Fellow), AIIT, TEPMatthew Hutton MA, CTA (fellow), AIIT, TEP author of Capital Tax Review, comments on the Court of Appeal decision in Wood and another v Holden.ContextChargeable gains accruing to a company which is not UK resident but, if UK resident, would be a close company are under TCGA 1992 s13 apportioned to participators in the company who are resident or ordinarily resident in the UK and who, if an individual, is domiciled in the UK. Apportionment ... Continue Reading

VAT Voice by Steve AllenSteve Allen, Director of VAT Solutions (UK) Ltd, comments on the significance of recent Court decisions on the issue of VAT avoidance.Avoidance or evasion?Over the past few years HMRC have been aggressively challenging VAT avoidance schemes and seemed to have forgotten the difference between avoidance and evasion. To remind readers, avoidance is perfectly legal and is obtained by ordering your tax affairs in such a way as to give the least tax payable. Evasion is illegal, ... Continue Reading

Monthly Tax Review by Matthew Hutton, MA, CTA (Fellow), AIIT, TEPMatthew Hutton MA, CTA (fellow), AIIT, TEP author and presenter of Monthly Tax Review, highlights some important considerations for settlors who retain an interest in a trust.Context: what is the value of a gift to yourself?At first sight the concept of a gift to yourself is a nonsense and does not appear to have troubled the draftsman of IHTA. But such is the world of the POA rules that we are now required to consider this question. Avoiding ... Continue Reading