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VAT Voice by Andrew NeedhamAndrew Needham, Director of VAT Solutions (UK) Ltd, outlines a recent case supporting the Lennartz principle for the recovery of VAT on mixed use assetsBackgroundThe 1991 ‘Lennartz’ ECJ decision established a principle for the recovery of VAT on assets with both business and private use. The principle established in Lennartz (and later in ‘Bakcsi’), was that a taxable person may take initial input tax deduction on the full cost of goods purchased as a business ... Continue Reading

TaxationWeb by Julie Butler, FCAJulie Butler FCA, of Butler & Co, considers opportunities for farmers to take advantage of business asset taper reliefThere are many ways in which today's modern farmer can diversify and create development opportunities on and within the land they own. The use of Business Asset Taper Relief greatly aids today's diversifying farmer and there are many opportunities in which the farmer can make use of this very beneficial relief. Business Asset Taper ReliefBusiness ... Continue Reading

TaxationWeb by Julie Butler, FCAJulie Butler FCA, of Butler & Co, outlines a potential IHT pitfall and potential planning possibility for family trading company owners.With property prices having increased so much in recent years and with most houses exceeding the Nil Rate Band for Inheritance Tax (IHT) there is great concern over sheltering private investments (and possibly property) from inheritance tax in the small family company. IHT business property relief (BPR) is a complete exemption from ... 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 two points of practice on pre-owned assets tax, and on Limited Liability Partnerships (LLPs)Pre-owned Assets Regime: Avoid by Sale to Spouse?ContextConsider adapting the traditional double trust scheme by having a sale of the house to a spouse rather than to a life interest trust for the settlor. Ensuring exclusion from POA by transfer to spouseThe ... Continue Reading

VAT Voice by Andrew NeedhamAndrew Needham, Director of VAT Solutions (UK) Ltd, explains some advantages and disadvantages of VAT registration for service businessesVAT Solutions Ltd recently heard from a client who had started a new accountancy practice, and although he was still below the VAT registration threshold, he wondered if it would be beneficial for him to register for VAT. ’Pros’ and ‘cons’As with most things, there are pros and cons in registering for VAT. On the down side, you ... Continue Reading

Capital Tax Review by Matthew Hutton, MA, CTA (Fellow), AIIT, TEPMatthew Hutton MA, CTA (fellow), AIIT, TEP author of Capital Tax Review, examines a potentially unfortunate consequence of the Pre-Owned Asset Tax on newly-married couples.ContextNow that so many stable relationships exist where the couple is not married, gifts subject to a gift with reservation of benefit (GWR) must have become commonplace, although generally unrecognised. Even those aware of the issue may have been relatively sanguine ... Continue Reading

Tolley's Practical Tax by Mike EvansMike Evans, Director of Employment Taxes at PKF (UK) LLP, looks at the income tax and Class 1 NICs treatment of compensation payments made and benefits in kind provided on and after the termination of employment.HM Revenue & Customs (HMRC) has over a number of years identified termination payments as a ‘top ten’ target for employer compliance settlements. It is actively targeting the income tax and Class 1 NIC treatment of termination payments when its Employer ... Continue Reading

TaxationWeb by Burges Salmon LLPBurges Salmon LLP outline three points of practice regarding Inheritance tax, Industrial Buildings Allowance and exit charges on migration.Inheritance Tax and Pension Simplification – the discussion paperHM Revenue & Customs issued a discussion paper on 21 July 2005 on the application of Inheritance Tax ("IHT") to the new situations arising under the simplified pensions regime due to come into effect on 6 April 2006. IHT legislationIHT is generally payable on death ... Continue Reading

TaxationWeb by Arthur Weller & Amer SiddiqTax expert Arthur Weller and property investor Amer Siddiq outline five simple methods that can be used to reduce or possibly even legitimately wipe out any tax liability.1. Look to claim costs as ‘revenue’ costsIf you can claim large costs as ‘revenue’ costs rather than ‘capital’ costs then you can reduce your annual property income tax bill in a big way. Sometimes it is easy to determine whether a cost is of a capital nature or not. For example, ... 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 approach adopted by HM Revenue & Customs where goodwill is considered to be overvalued upon the incorporation of a business.ContextWith the transfer by a sole trader of his business to a newly incorporated company in which he has a controlling interest, it often happens that the company buys the goodwill of the business. HMRC have found themselves ... Continue Reading