Many individual business owners are aware that a capital gains tax (CGT) rate of only 10% can apply if business asset disposal relief (BADR) (previously known as entrepreneurs’ relief (ER)) is available on qualifying business disposals, up to a lifetime limit. A major ‘headline grabber’ was the Chancellor’s announcement in the March 2020 Budget that… Read More »
It might be considered straightforward enough to identify a ‘business’. However, that is not necessarily the case. HMRC will not give advance clearance on whether activities constitute a business. However, this question can be important for various tax purposes. An important issue For example, whether a business exists is a potential issue for many buy-to-let… Read More »
The landlord of a furnished holiday letting (FHL) that satisfies certain conditions can potentially benefit from ‘special’ tax treatment and certain tax reliefs, which landlords of other properties cannot access. Does it qualify? The requirements for a furnished property to be ‘qualifying holiday accommodation’ are beyond the scope of this article, but the three basic… Read More »
Most individuals owning a house will be aware of the principal private residence (PPR) relief rules for capital gains tax purposes. The PPR rules require that the dwelling has been occupied as the individual’s only or main residence at some point during their period of ownership (TCGA 1992, s 222(1)). Two fundamental requirements sometimes overlooked… Read More »
The valuation of assets can be important for tax purposes. For example, a valuation may determine the amount of inheritance tax (IHT) payable on a lifetime transfer (e.g. the transfer of an investment property to a discretionary trust), or on an individual’s death estate. In addition, an asset valuation may be needed to determine the… Read More »
The principal private residence (PPR) relief rules for capital gains tax purposes require a dwelling to have been a ‘residence’ of the individual to whom the gain accrues (TCGA 1992, s 222(1)). What is a ‘residence’? The term ‘residence’ is not defined in the PPR relief legislation. However, case law indicates that the requirement for… Read More »
The capital gains tax (CGT) annual exemption is a welcome and useful tax break for many taxpayers. It is generally available to individuals (i.e. £12,300 for 2021/22), personal representatives (for the tax year of death and the two following years) and trustees (albeit the maximum entitlement is generally one-half of the exemption for individuals; see… Read More »
A business generally comprises various assets, one of which is often goodwill. However, a new business will not normally have goodwill; the goodwill of a business is broadly the advantage of the reputation and connection with customers that the business possesses. A new business will not normally have a ‘name’ or reputation as such. Goodwill… Read More »
An individual might occupy a dwelling for only a short period of time before selling it. They will normally hope to be entitled to principal private residence (PPR) relief for capital gains tax purposes in respect of a gain on disposal. However, a common question in such circumstances is: ‘how long does an individual need… Read More »
Business asset disposal relief (BADR; previously known as entrepreneurs’ relief (ER)) is a valuable and much sought-after capital gains tax relief. However, the conditions for claiming the relief are often problematic. Jumping hurdles For an individual shareholder disposing of shares in a company, the most common condition for relief is that throughout a two-year period… Read More »