Author Archives: Mark McLaughlin

Gifting shares: The interest relief trap

Many individual shareholders of owner-managed businesses have bought their shares in the company using a bank loan. Alternatively, they may have used the borrowings to inject funds into the company’s trade; or to refinance a loan for either purpose. Jumping the hurdles Tax relief can generally be claimed for interest paid at a commercial rate… Read More »

Tax relief for gym costs?

It may be tempting for self-employed individuals to claim tax deductions for expenditure that is not ‘wholly and exclusively’ for the purposes of their trade, profession or vocation. Unfortunately, the tax rules generally preclude a deduction for such expenditure. Mixed use However, if an expense has a mixed (i.e., business and private) purpose, the tax… Read More »

Too much of a good thing?

Business property relief (BPR) offers relief from inheritance tax (IHT) of 100% (or 50%) on a transfer of value which is attributable to ‘relevant business property’. Unfortunately, not all unquoted company shares qualify for BPR. Certain company activities make the shares ineligible for relief, such as dealing in stocks or shares, land or buildings, or… Read More »

Another one bites the dust!

Inheritance tax (IHT) business property relief (BPR) is available to business owners if certain conditions are satisfied. BPR (at the 100% rate) applies to ‘relevant business property’ including a business or interest in a business. Unfortunately, not every business potentially attracts BPR, such as where the business consists wholly or mainly of ‘making or holding… Read More »

What if it all goes wrong?

Company purchases of own shares can often be helpful. For example, a shareholder in a family trading company may wish to retire and exit the company, to make way for the next generation. It’s the law However, the transaction must satisfy company law requirements (in Companies Act 2006) to be a valid company purchase of… Read More »

Any chance of a discount?

Land and buildings (e.g., the family home) are often held in joint names, such as by spouses (or civil partners), or parent and offspring. When it comes to valuing an interest in a jointly-owned property for inheritance tax (IHT) purposes (e.g., on death), it is necessary to consider the valuation methodology. Disposing of a joint… Read More »