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Capital Tax Review by Matthew Hutton, MA, CTA (Fellow), AIIT, TEPMatthew Hutton MA, CTA (fellow), AIIT, TEP author of Capital Tax Review highlights a potential inheritance tax or pre-owned assets tax ‘trap for the unwary’ContextA significant exemption from the Gifts With Reservation (GWR) regime was introduced by FA 1999 as FA 1986 s102B. This presupposes a gift on or after 9.3.99 of an undivided share in an interest in land where: • the donor does not occupy the land; or • the donor occupies ... Continue Reading

VAT Voice by Steve AllenSteve Allen, Director of VAT Solutions (UK) Ltd, considers the VAT position of ‘intending traders’.It is a common situation for a business to be set up but not to trade for some time. For example, where a new property development company is set up and seeking an appropriate property to purchase, or where a subsidiary is formed to deal with a new line of business and they are still getting in orders. Many businesses incur significant amounts of input tax on start-up costs ... Continue Reading

Tolley's Practical Tax by Roger JonesRoger Jones considers the significance of goodwill on transfer of a business and mistakes that can be made.The recent Special Commissioners' decision of Colley and Another v Clements [2005] STC (SSCD) 633 makes interesting reading. Seemingly, Mr Colley and Mr Hillberg, having traded in partnership for some time, transferred the partnership business to a limited company. However, there was no documentation to record what had actually been done. Evidence produced ... Continue Reading

VAT Voice by Steve AllenSteve Allen, Director of VAT Solutions (UK) Ltd, provides an update on two recent VAT developments.Court of Appeal allows VAT recovery on Company car with private use exclusionsThe Court of Appeal (CoA) recently released its judgment in the Elm Milk Ltd case on whether a company is entitled to deduct VAT on the purchase of a Mercedes car that had been purchased exclusively for business use and is not available for the private use of any person. The CoA has dismissed HMRC's ... Continue Reading

Employee Reward Structures by Aidan LangleyAidan Langley, author of ‘Employee Reward Structures’ provides an outline of share valuation issues for employment income purposes.There are, in effect, three different valuation standards used in ITEPA 2003. First, there is the “money’s worth” valuation that is found in ITEPA 2003, s 62. This is used, for example, to determine the taxable value where an employee receives unrestricted shares. Second, there is the CGT valuation, which is used, ... 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 a potential pitfall in IHT planning involving the family home.ContextThere is a well known (in general) trap, provided by FA 1986 s103 which in certain circumstances disallows a deduction for IHT purposes for a debt on death. In broad terms, where money is owed by the deceased under a debt arising on or after 18.3.86 to somebody to whom the deceased ... Continue Reading

VAT Voice by Andrew NeedhamAndrew Needham, Director of VAT Solutions (UK) Ltd, highlights a significant case concerning the time limits for reclaiming VAT.The Court of Appeal has given its decision in an important case regarding the 3-year capping provisions on VAT reclaims. The appellant (Fleming) was a dealer in specialist cars. In 2000, Mr Fleming made a claim for repayment of the input tax paid on the three cars purchased in 1990. HMRC (C&E as was) refused the claim on the basis that the claim ... Continue Reading

TaxationWeb by Bob Fraser MBA MA FSFABob Fraser, MBE, MBA, MA, FPFS, TEP of Towry Law Financial Services Ltd outlines HMRC’s approach on the tax deductibility of employer pension contributions post A-Day.There has been much uncertainty as to the approach that HMRC will take, post “A” Day, in respect of employer pension contributions, particularly in respect of director and associated persons contributions. Draft guidanceHMRC has now issued draft guidance on the HMRC website relating to the ... Continue Reading

Busy Practitioner by Mark McLaughlin CTA (Fellow) ATT TEPMark McLaughlin CTA (Fellow) ATT TEP considers some issues for tax practitioners to consider when dealing with HMRC self-assessment enquiries for individualsFollowing the recent submission of 2005 self assessment returns for most individual clients, HMRC will commence issuing enquiry notices under TMA 1970, s 9A. Tax return enquiries are obviously not welcomed by clients or practitioners, and can involve a considerable amount of time and work. ... Continue Reading

Capital Tax Review by Matthew Hutton, MA, CTA (Fellow), AIIT, TEPMatthew Hutton MA, CTA (fellow), AIIT, TEP author of Capital Tax Review, points out the applications and limitations of an Extra-Statutory Concession on Capital Gains Tax.ContextA relief along the lines of TCGA 1992 ss 247 and 248 (relief on compulsory acquisition of land) may be claimed to alleviate CGT which would otherwise arise where interests in land which is in the joint beneficial ownership of two or more persons are exchanged ... Continue Reading