Mark McLaughlin Associates

Chartered Tax Advisers

Incorporation: A Borrowing Trap

Many landlords introduce properties into their rental businesses, which may have already been held for some time (e.g. gifted or inherited property). Those landlords are, in effect, introducing capital into the business, broadly equal to the market value of the property when it was introduced, less any outstanding mortgage, etc. Allowable borrowings HM Revenue and […]

Tax Return Penalties: HMRC’s Fatal Flaw

Everyone makes mistakes. Fortunately, HM Revenue and Customs (HMRC) has the power to suspend a penalty for a ‘careless’ error in a tax return (FA 2007, Sch 24, para 14). HMRC officers are instructed to consider the suspension of every penalty for a careless error (see HMRC’s Compliance Handbook manual at CH83131). Suspending penalties However, […]

Tax Return Estimates – Careless Or Deliberate?

The use of an estimated figure may sometimes be necessary when preparing a tax return. For example, records of a particular source of income may have been lost, and it might not be possible to obtain the relevant information from third parties. Is it accurate?  HM Revenue and Customs (HMRC) acknowledges that taxpayers will occasionally […]

Company Owners – Get The Formalities Right!

Small and family company owners are generally very busy trying to build successful businesses. Formalities of operating and administering the company can easily be overlooked. However, aside from any adverse company law implications, this can have unfortunate tax consequences. For example, if a small owner-managed trading company proves to be unsuccessful, the value of its […]

Property Into Trust – No Turning Back?

The tax implications of transactions are sometimes overlooked; or perhaps there may have been a misunderstanding about the tax implications. For example, an individual may transfer a property into a discretionary trust, without appreciating that the gift was an immediately chargeable transfer for inheritance tax (IHT) purposes, triggering an unexpected tax bill. HM Revenue and […]

Private Residence Relief: Another Disappointed Taxpayer

Private residence relief (PRR) for capital gains tax (CGT) purposes is potentially very generous. For example, a UK resident individual who is a higher rate taxpayer is liable to CGT on a residential property gain at 28% (for 2017/18). However, if PPR is available in full, the individual’s gain on disposal is not a chargeable […]

Avoid Paying HMRC By Cheque!

Many taxpayers pay their tax liabilities close to the statutory deadline for making such payments. For example, an individual who faced a large tax bill on 31 January 2017 might have needed time to find the necessary funds. Pay on time…or else? If the individual was unable to pay by 31 January 2017, it would […]

Gifting Cash Into Trust – IHT Free!

The inheritance tax (IHT) exemption for normal expenditure out of income is very generous. There is no upper limit on an individual’s gifts (or ‘transfers of value’) in monetary terms; the only cap is the amount of ‘spare’ income eligible to be given away. Perhaps unsurprisingly, there are strings attached. A gift will only benefit […]

Entrepreneurs’ Relief – Share And Share Alike!

Family companies have always been a relatively common and popular trading medium, particularly husband and wife (or civil partner) companies. This popularity is likely to increase over time, following changes to the income tax regime for dividends from 6 April 2016. The possibility of husband and wife each utilising a dividend nil rate (or ‘allowance’) […]

Unpaid Deductions: Company Owners Beware!

Owner-managed and family businesses (among others) often fail. Unfortunately, the business owner’s problems do not necessarily end there. For example, an owner-managed company may have owed HM Revenue and Customs (HMRC) substantial amounts of PAYE income tax and National Insurance contributions (NIC) when it ceased trading and was liquidated. Those company liabilities may relate to […]

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