Tag Archives: Articles

Transactions in Securities

When dealing with company reorganisations and some business sales, it is generally good practice to apply to HMRC for clearance (under ITA 2007, s 701) that the anti-avoidance rules regarding ‘transactions in securities’ will not apply to treat a capital transaction as giving rise to a potential income tax liability. The rules were originally introduced… Read More »

Dividend Oddities

Recent case law has highlighted two interesting scenarios involving dividend payments. Recategorised dividends In Stirling Investments v HMRC [2010] VKFTT 61 (TC) TCOO374, a VAT Case, a husband and a wife partnership were also director shareholders of a company. The partnership invoiced the company for a management charge of £525,000 plus VAT. However, the company… Read More »

IHT – Deliberate Omissions

For Inheritance Tax (IHT) purposes, the general rule is that a transfer of value requires positive action by the person making it, such as the gift of an asset. However, in certain circumstances a failure to take positive action is treated as a disposition as well. In particular, the deliberate omission to exercise a right… Read More »

Negligible Value Claims

An unfortunate effect of the recession has been an apparently increasing number of capital losses on assets. A negligible value claim (under TCGA 1992, s 24) is a useful mechanism to realise an allowable capital loss. In cases involving qualifying shares, the loss can be converted to an income tax loss and offset against general… Read More »

Employment Status

The issue of whether a worker is employed or self-employed is often unclear. This uncertainty has resulted in a number of Court cases over the years. From those cases various indicators have been established, pointing towards either a contract of service (employment) or a contract for services (self-employment). Treating a worker’s employment status correctly is… Read More »

Discovery Assessments

Taxpayers understandably want certainty about their tax affairs, and demand finality when submitting their tax returns, that HMRC will be unable to make a ‘discovery’ outside the normal enquiry window. Unfortunately, there is invariably uncertainty when submitting returns about whether disclosures in it (normally in the ‘white space’) are sufficient to bring about the required… Read More »

Management Charges

The use of management charges between related businesses is a relatively popular and well-known tax planning technique. Management charges are often considered if, for example, companies are ‘associated’ for small companies’ relief purposes to minimise tax liabilities by ensuring that more profits are subject to a lower rate of corporation tax overall.  There is some… Read More »

Regulating Tax Advisers

HMRC seems determined to adopt a ‘policing’ role in respect of tax agents. A further HMRC consultation document (‘Working with Tax Agents: The Next Stage’) was published with the Pre-Budget Report 2009. There are two main categories of tax agents; those who are affiliated to a professional body, and those who are not. HMRC’s first… Read More »

Tax Avoidance ‘Schemes’

It is no secret that HMRC is taking a tougher line against tax avoidance. Indeed, there is a degree of openness about the type of tax planning arrangements that HMRC regards as unacceptable, or which are not considered to work as intended. HMRC has an ‘Anti-avoidance Group’ section on its website, which sets out HMRC’s… Read More »

Associated Companies

When dealing with small and owner-managed companies, it can often be difficult to ascertain the number of associated companies. For small companies relief purposes, the lower (£300,000) and upper (£1.5 million) ‘relevant maximum amounts’ are divided between active associated companies in the accounting period. The small companies’ rate of 21% applies to profits up to… Read More »