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TW Ed is reassured that the new anti-avoidance provisions will not prevent conventional agreements between vendor and purchaser to fix a price. When the new anti-avoidance measures were announced, I read “Businesses who seek to obtain tax advantages by... ... manipulating disposal values leading to excess capital allowances...” and I was concerned that this could be used by HMRC to attack conventional agreements whereby the price for eligible items is fixed some way off market value ... Continue Reading

Expenses incurred in the running of a property letting business are deductible from rental income received in calculating the taxable profit. However, just because a payment has been made, it does not necessarily mean that it will be allowable.Strictly, for an expense to be allowed the business purpose must be the sole purpose; there must be no dual reason for the expense. Where it is difficult to split the business element from any private element then the whole expense amount is usually disallowed.In ... Continue Reading

LITRG have examined all of the Autumn Statement announcements, to see how they will affect those on low to modest incomes. This article explores some of the key areas. Introduction The Chancellor introduced his Autumn Statement and Spending Review 2015 by saying that it delivers on the Government’s commitment to “put security first”, both national security and economic security for working people. The watchword was “build”, as he talked of the need to “build” ... Continue Reading

In case (like us) you were struggling to find anything useful in the .gov site, here is HMRC's Autumn Statement 2015 landing page... Continue Reading

It must be said that there seemed to be relatively few changes announced earlier today. I had expected more extensive measures to generate further tax revenues because of the reversal of tax credits. A brief summary follows. But I have a hunch that the 2016 Finance Act may be a little more substantial. As ever, the real work will begin when the Bill is published. 1. The government plans to levy an additional 3% SDLT on the acquisition of Buy-To-Let residential properties and second homes, from ... Continue Reading

TW Ed warns that people who have borrowed from their companies etc. to invest in residential property may be in for a shock. Yesterday, I posted an old e-mail relating to the withdrawal of interest relief for residential property businesses – or, as I like to call it, “death by four cuts”. With one eye on the screen and another counting down to my favourite Chancellor’s third Budget of the year, (or is that my third-favourite Chancellor’s “Budget of the Year”..?), ... Continue Reading

The following is a copy of an e-mail which was sent to the HMRC contact for the forthcoming interest relief restriction for residential landlords. The e-mail was originally sent in September. The first part considers the broader implications of the new policy. The second part analyses the draft legislation as originally issued.  The legislation has now received Royal Assent, sporting a new ITTOIA 2007 s 274B to cover a Basic Rate tax credit for discretionary Trusts. But other issues remain, ... Continue Reading

Many people are not aware that you can claim expenses incurred in the seven years before commencement of trading against your first year’s trading profits.The expenses are treated as having been incurred on the first day of trading. The rules for determining whether a pre-trading expense is deductible mirror those for expenses generally. For a pre-trading expense to be allowable it must have been incurred wholly and exclusively for the purposes of the trade.Make sure you keep all receipts for ... Continue Reading

A cross-party committee of MPs has said that it would be right for the Chancellor to rethink tax credit reforms that went “too far and too fast”. Government tax credit proposals The cuts proposed for April 2016 would have run “against the government’s objective of making work pay”, according to the Commons Work and Pensions Committee’s report, which is summarised below. The Chancellor announced sweeping cuts to the tax credits system in his Summer Budget. However, ... Continue Reading

HMRC will henceforth accept the transfer of personal allowances as prescribed by the new marriage allowance by phone as well as online. Background The marriage allowance allows one spouse or civil partner to give up part of their personal allowance to their spouse or civil partner. There are conditions to be satisfied as are noted below. Up till now it has only been possible to make this transfer of allowances online at www.gov.uk/marriage-allowance but now HM Revenue & Customs (HMRC) will ... Continue Reading