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Under the ‘Non-Resident Landlord Scheme’ (NRLS) where the deductible expenses exceed rental income for any quarter the excess expenses are: carried back for offset against rental income paid to the same landlord for previous quarters in the same tax year, on a ‘last in, first out’ basis; then carried forward for offset against future quarters’ net rental profits. RepaymentsCarry back will result in a repayment of tax for the previous quarter in the tax year ... Continue Reading

Peter Vaines of Squire Patton Boggs considers the changes announced in the Summer 2015 Budget for trusts and for non-domiciled persons. Inheritance Tax : Trusts There has been a great deal of discussion regarding the calculation of the 10 year charge on trusts and in particular where the settlor has established more than one trust. It will no longer be necessary to include non relevant property in the calculation of the effective rate for the 10 year charge and the exit charges. Where property ... Continue Reading

Unrepresented taxpayers frequently miss out on an additional valuable relief, which is the availability of a three-year carry-back for losses incurred in the opening years of a trade.Example:John was previously employed on a salary of £50,000 per annum, and makes a loss in his first year of trading of £20,000.He anticipates making a profit the following year of £10,000.John can elect to carry this loss back three years and hence obtain tax relief on this loss both earlier and at ... Continue Reading

The ‘Non-Resident Landlords Scheme’ (NRLS) requires that where there is no UK-based representative/agent, the rent being paid directly to a landlord who lives outside of the UK, the tenant must deduct basic rate tax from the rent paid and pay the tax to HMRC on a quarterly basis. The calculation is of tax on the gross amount actually payable to the landlord (plus any payments made by the tenant where the payment is not a deductible expense). Tenants do not have to operate the ... Continue Reading

The Parliamentary answer to a request for clarification about future levels of the child tax credit threshold states that its reduction will depend on a number of factors. Background In a press release issued on 10 July 2015, the Low Incomes Tax Reform Group (LITRG) called on the Government to resolve some confusion that had arisen about future levels of the child tax credit threshold, which had not been announced in the Summer Budget. Parliamentary question and answer On 20 July 2015, in answer ... Continue Reading

On the transfer of property into a trust, the original owner of the property (the ‘settlor’) is treated as having gifted the property to the trust at market value for capital gains tax (CGT) purposes. The ‘market value’ rule applies because the settlor and trust are deemed to be ‘connected’ when the trust comes into existence.If the property transferred has increased in value since the date of the settlor’s acquisition, then the settlor will have a chargeable ... Continue Reading

HM Revenue and Customs (HMRC) know that all agents and tax advisors who manage their clients’ tax affairs will sometimes need help and support from us.  We can help you help your client with the following tailor made products and services: Webinars and Videos Live webinars last no more than an hour. You can ask questions throughout the presentation and get answers from your HMRC host. These have been produced for tax agents and advisers to provide help and support on topical subjects. Online ... Continue Reading

The government has published the Budget Summer 2015 Finance Bill and Explanatory Notes. 2015 Summer Finance Bill 2015 Summer Explanatory Notes Continue Reading

Job-related expenses that your employer paid or reimbursed during the tax year 2014/15 should not carry any additional tax liabilities – but you may need to claim the tax relief. Introduction Where your employer pays or reimburses expenses that are wholly, exclusively and necessarily to do with your employment, they may well have an agreement with HMRC that no reporting is required – meaning there is nothing further for you to do. But if your employer does not have such a reporting ... Continue Reading

EBT Schemes / Advance Payment Notices (APNs) A query from an adviser, who had just taken on a client who had invested in an Employee Benefit Trust, or EBT, and had recently received an Advance Payment Notice, or APN. admin@j-a-s.org.uk wanted to know what the implications might be. To the uninitiated, an APN is basically where HMRC dons a mask and demands money with menaces  - sorry,  says your tax strategy doesn’t work and you’ve got to hand over the tax/NIC on account in ... Continue Reading