If an individual gifts an asset to another individual, it will generally be a ‘potentially exempt transfer’ (PET) for inheritance tax (IHT) purposes, unless a specific IHT exemption applies (e.g., for gifts between UK domiciled spouses). A PET is provisionally treated as an exempt transfer when made, which becomes exempt if the donor survives at least seven years thereafter.
Mark McLaughlin looks at a possible let-out from an inheritance tax charge on certain asset transactions.
The close company loan to participator tax charge (in CTA 2010, s 455) is a reasonably well-known part of our tax code. Broadly, where a loan or advance is made to a shareholder – typically where an overdrawn director’s loan account arises – that has not been cleared or repaid within nine months of the company’s year end, the company must pay a 33.75% tax charge on the amount that remains outstanding. In practice, many overdrawn loan accounts are cleared by the company making a bonus payment or a dividend payment to the director-shareholder within the nine-month repayment ‘window’.
Peter Rayney looks at the potential 33.75% tax charge that can arise on many management buyout deal structures.
The high income child benefit charge (HICBC) claws back child benefit where either the claimant or their partner has adjusted net income in excess of the trigger threshold.
Sarah Bradford explains how to reinstate child benefit following changes to the high income child benefit charge from April 2024.
Readers will be aware that HMRC has long had concerns about research and development (R&D) claims under the small and medium-sized enterprise (SME) regime, particularly those that resulted in a ‘real money’ tax credit payable to the claimant company. This article sets out how HMRC’s approach to R&D claims has changed over the years.
Lee Sharpe considers how HMRC’s campaign against poorly-founded research and development relief claims may be undermining genuine claims and probably government policy.
A company is a separate legal entity, distinct from the shareholders that own it. Consequently, if the directors and shareholders want to use the profits made by the company for their personal use, they will need to extract those profits first. There are various ways in which this can be done; some are more tax-efficient than others.
Sarah Bradford considers options for extracting profits from a company in a tax-efficient manner in the 2024/25 tax year.
HMRC recently undertook a ‘One to Many’ letter campaign, wherein HMRC’s skilled data analysts undertake to mine nuggets from a huge range of sources to test for omissions or errors in tax returns.
Lee Sharpe reports on HMRC getting all ‘Nancy Drew’ with its sleuthing over company reporting and shareholders’ dividend income returns.
Some company shareholders may either be unaware or have forgotten about a relatively unknown capital gains tax (CGT) relief that offers a reduced CGT rate of only 10% on qualifying gains of up to £10m during their lifetime, if certain conditions are satisfied.
Mark McLaughlin highlights a relatively unknown and infrequently used but generous capital gains tax relief.
Owner-managers can spend a significant amount of time and energy building a successful and profitable trading company.
Joe Brough looks at tax issues for business taxpayers and their tax advisers when a company is coming to an end.
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