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TaxationWeb's Mark McLaughlin highlights two recent tax cases which prove HMRC can get things very wrong. I was shocked and appalled this week to read a First-Tier Tribunal case where HMRC imposed a penalty for a late tax payment on a taxpayer who was suffering from cancer. HMRC had refused to accept that the taxpayer's late payment was attributable to her illness. They argued (among other things) that the reason for the late payment was that some of the taxpayer's funds ... Continue Reading

Beneficiaries under a deceased’s will are deemed to inherit the assets at their market value at the date of death. However, if a property is sold within four years of death at a lower price than the value used for the inheritance tax (IHT) calculation on the estate, that earlier IHT liability can be reduced by substituting the lower sale proceeds for the agreed value, therefore saving the estate IHT. The relief is known as ‘loss on sale of land relief’ and if there is more ... Continue Reading

A ‘Mesher’ order is a court order that postpones the sale of the marital home, the actual date of sale being dependent upon certain specified events. If the property subject to the order is sold more than three years after the date of separation then the calculation is the proportion of gain made after the three years in relation to the total period of ownership or 31 March 1982, whichever is the latest date. The only situation where HMRC will allow more than three years’ ... Continue Reading

Advice on when to pay a salary or bonus in order to maximise cashflow benefit, from Tax Insider magazine. Introduction Payments of remuneration by a company are an allowable expense for corporation tax. They are taxable on the employee or director who receives them, but with a little care the tax payable by the recipient can be delayed. Payments of remuneration for services rendered during an accounting period of a company, and included in its accounts, will be an allowable deduction ... Continue Reading

TW Ed ponders whether or not the Public Accounts Committee is disappearing up its own well-meaning publicity. Well, it’s the New Year and people are probably focusing  on Self Assessment – and if you’re one of the lucky half-million or so who HMRC estimates will need to be in SA for the first time thanks to the new Child Benefit clawback, welcome to the party. Before Christmas, the Public Accounts Committee (PAC) gave HMRC quite a drubbing. Courtesy of Ms Hodge: “HMRC... ... Continue Reading

With the 31 January tax return deadline just around the corner, HM Revenue and Customs (HMRC) has revealed the ‘Top 10 oddest excuses’ for sending in a late return. The following bizarre, exotic and flimsy excuses have all been used by tardy taxpayers: My pet goldfish died (self-employed builder); I had a run-in with a cow (Midlands farmer); After seeing a volcanic eruption on the news, I couldn’t concentrate on anything else (London woman); My wife ... Continue Reading

Mark McLaughlin reviews the 6th edition of McCutcheon on Inheritance Tax McCutcheon on Inheritance Tax  (Sixth Edition) By Withers LLP, Aparna Nathan and Marika Lemos ‘McCutcheon on Inheritance Tax’ is a long-established authority on inheritance tax (IHT). The publication is now in its sixth edition. The fifth edition was published three years before the current one. The time gap between editions is perhaps a reflection of the fact that IHT is not the fastest moving ... Continue Reading

TaxationWeb's Mark McLaughlin points out a significant shortcoming in HMRC's new residence indicator. HMRC gave taxpayers an early Christmas present on 20th December, with the release of an updated version of the Tax Residence Indicator tool. The tool is intended to help individuals determine whether they are considered to be resident in the UK from tax year 2013-14 onwards for income tax and capital gans tax purposes. HMRC's introduction to the Tax Residence Indicator tool ... Continue Reading

HM Revenue and Customs (HMRC) has revealed that 1,566 people found time during the Christmas Day festivities to send an online tax return. The figure represents a 1 per cent increase on the 1,548 people who filed online on Christmas Day 2012. The busiest filing hour on Christmas Day was just before lunch, from midday to 1pm, when 144 people hit the send button on their completed return. This followed 17,000 individuals who booted up their computers, got their financial information ... Continue Reading

‘Hold-over’ relief is a way of deferring payment of CGT on certain assets including land and buildings used in a business until the new owner of the asset sells. The donee, in effect, takes over the original cost of the asset and may eventually have to pay CGT on both the gain incurred from the date of gift plus the gain ‘held over’. HMRC have produced Help Sheet 295 ‘Relief of gifts and similar transactions’ that details the procedure. A claim form needs ... Continue Reading