A roundup of the latest news from the world of tax for individuals, businesses and professional advisers. Click on the links below to view the full articles. Do Nil Rate Legacies include the Transferable Nil Rate Band? Loring v Woodland Trust highlights the care that must be taken when interpreting (and drafting) nil rate band legacies in wills. Employee Share Ownership Update A summary of some recent changes to the rules for; employee shareholders, EMI share option schemes and share incentive plans Business Property Relief Update New technical guidance is available regarding the impact on BPR of (a) surplus cash, and (b) partnership structures. Is a Dividend Waiver a Settlement? HMRC continue to pay close attention to income spli...

A roundup of the latest news from the world of tax including highlights from the Autumn Statement 2013 and recent tax cases of interest. Click on the links below to view the full articles. Demolition of a home - Private Residence Relief and CGT The recent case of Paul Gibson v HMRC provides some interesting points in relation to capital gains tax and Private Residence Relief. Entrepreneur's Relief & Surplus Cash We have recently been involved in a recent case where assurance was sought from HMRC that surplus cash would not affect the company's trading status. New Reliefs for Indirect Employee Ownership  An outline of the new rules for qualifying "Employee Ownership Trusts". Changes to Capital Gains Tax - Autumn Statement 2...

The recent case of Paul Gibson v HMRC (TC03021) provides some interesting points in relation to capital gains tax and Private Residence Relief. Brief Facts Mr Gibson bought a property called Moles House, which he lived in as his main residence. Through a number of convoluted arrangements with a friend, and his then girlfriend's  parents, Mr Gibson decided to demolish the house and build a new one on the plot. After the plumbing had gone in on the new house he was described as living there in a "camping" existence. Soon afterwards financial difficulties meant the house was sold, overall for a gain. The gain was not declared on his tax return, as Mr Gibson believed he had sold his main residence. The tribunal was asked whether P...

The government has announced two important changes to capital gains tax (CGT) in the Autumn Statement 2013: 1. Private Residence Relief (PRR) Formerly known as Private Residence Relief or PPR, this relief exempts the gain arising on a sale of a persons only or main home. Broadly speaking, the exempt element of the gain is calculated by comparing the period of ownership to the period of occupation. However, there are a number of important extensions to the relief, known as periods of deemed occupation. Perhaps the most useful of these is that where a person has at any time lived in the property as their sole/main residence, the gain attributable to the last 36 months of ownership will automatically be exempt from CGT. From April 2014...

Key Lessons to be learnt The recent case of Stephen & Pauline Rumbelow v HMRC (TC03022) concerned the liability of the taxpayers to UK capital gains tax, during a period they claimed to be non UK resident. The case involves tax years prior to 2013/14 and as such involved an examination of the 'old' common law meaning of residence and cases such as Gaines-Cooper. This common law test was replaced by a statutory residence test in April 2013, therefore the Tribunal's analysis of the meaning of residence will be of limited use going forwards. However the case highlights some important messages to consider where tax advice is being put into practice: 1. Follow the advice carefully In this case the tribunal felt that the advice receive...

A roundup of the latest news from the world of tax including highlights from the Finance Act 2013 as well as recent tax cases of interest. Click on the links below to view the full articles. Lifting the Corporate Veil http://wp.me/p3gayI-4a The recent case of Prest v Petrodel Resources Ltd looks at the powers of divorce courts to pierce the corporate veil. Sale of Home but is it a Residence http://wp.me/p3gayI-40 The recent Moore case acts as a reminder that occupation by itself is not sufficient to make a house a 'residence' for capital gains tax purposes. Company Purchase of Own Shares - Transactions Void http://wp.me/p3gayI-3M The recent case of Russell Baker highlights the difficulties that arise where a company purchase of...

The self-assessment system means that it is the taxpayers obligation to register for tax returns with HM Revenue and Customs - but who needs to submit a tax return? Who Needs to Submit a Tax Return The tax rules state that all persons chargeable to income tax or capital gains tax that have not been issued a notice to submit a tax return by HMRC must notify their liability to tax unless certain exceptions apply (broadly speaking that all income is subject to PAYE or they are only subject to income tax at the basic rate). However it is perhaps easier to consider the occasions where a person may be required to notify HMRC and submit a tax return: - You dispose of assets resulting in a liability to capital gains tax (note - the disposal of ...

Where a person sells their home the gain is typically exempt from capital gains tax under the private residence relief (PRR) provisions (formerly known as principal private residence relief or PPR). Private residence relief is available on the sale of the taxpayers only or main residence,with the amount of relief being determined based on the length of ownership as compared to the length of occupation although certain periods of deemed occupation may also qualify for relief. However, the recent case of Moore v HMRC TC 02827 acts as a reminder that occupation by itself is not sufficient to make a house a home - or more specifically a 'residence' for capital gains tax purposes. Case law demonstrates that in order for a house to be a ...

This case centres around whether a painting, which hung in Castle Howard, was plant and thus deemed to be a "wasting asset" for capital gains tax purposes. The painting was on show to the public who paid to visit and look around the castle. The painting was sold by the estate in 2001 for circa £10m and if it were deemed to be a wasting asset no capital gains tax would be payable by the estate on its sale. The term 'plant' is not defined in statute and therefore needs to be interpreted in light of case law which has found that "in its ordinary sense it (that is, plant) includes whatever apparatus is used by a businessman for carrying on his business - not his stock-in-trade which he buys or makes for sale; but all goods and chattels,...