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Tax Insider

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  • FREE 3 Issues - The current September issue #153 and the previous two issues of August issue #152 and July #151.
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Here are just some of the strategies our tax experts are sharing with you this month:                       
  • IHT On Death: An Unfortunate Tale
    When someone dies, family members or friends may have the responsibility of dealing with the deceased’s estate. This may involve (among other things) applying for a grant of representation (in England and Wales), reporting the value of the deceased’s estate, and paying any inheritance tax (IHT) liability. Mark McLaughlin points out that a ‘do it yourself’ approach without professional assistance can be an expensive error when it comes to dealing with inheritance tax on a deceased person’s estate. 
  • Benefits-In-Kind: Changes Afoot?
    Under the government’s new timetable, draft Finance Bill 2018-19 clauses were published in July 2018. The Finance Bill, when published, will eventually become Finance Act 2019, when it receives Royal Assent in March 2019, so the new law can take effect from April 2019 or a later date. Of course, the draft provisions could be subject to changes announced in the Budget in November 2018, or as a result of representations made during the consultation period.  Sarah Laing looks at some proposals in the draft Finance Bill 2018-19 clauses which, if enacted, may affect many employers and employees.    
  • Factoring Debts: The VAT Consequences 
    The term ‘factoring’ covers a variety of services involving debt assignment in which the factor provides clients with finance in respect of debts owing from their trade debtors. Andrew Needham looks at the VAT consequences of debt factoring and how it affects tax points and bad debt relief.    
  • Will Your Training Costs Qualify For Tax Relief?
    Is tax relief available for training costs? Currently, it depends on whether the individual is self-employed or an employee. For the latter, it also depends on whether the employee or employer incurs the costs. Kevin Read discusses the current tax relief available for work-related training and looks at proposals to extend it to encourage self-funded training, particularly where ‘upskilling’.   
  • Gifting Investment Properties To Your Children 
    The benefits of someone gifting an investment property to their children can include spreading rental income and reducing inheritance tax (IHT). However, the tax implications of making such gifts should not be overlooked. Tony Granger outlines some important tax implications of a parent gifting an investment property to adult children.
  • Wind Up Woes?
    Getting money out of a company without paying income tax, short of winding up, has always been difficult, but even the automatic capital treatment of distributions in winding up may now be problematic in some situations. Ken Moody looks at the anti-avoidance rules potentially affecting the tax treatment upon the winding up of a company.   
  • Pilot Trusts: Dead Or Alive??
    Malcolm Finney checks out the current position on the use and implications of pilot trusts for inheritance tax purposes. The answer to the question posed in the title of this article is perhaps ‘slowly dying but by no means dead’! 
  • IHT Planning? HMRC Want To Know!
    Mark McLaughlin highlights the tightening of requirements for the disclosure of IHT planning arrangements to HMRC, which is aimed at requiring more planning schemes and arrangements to be disclosed to HMRC than before.
  • Divorce And Some Tax Issues To Note
    At the time of divorce it is probably fair to say that, the very wealthy apart, taxation issues are not usually at the forefront of either spouse’s mind. However, whilst understandable, a little thought and advice may often reduce tax liabilities quite significantly. Malcolm Finney looks at tax issues often overlooked. According to the Office for National Statistics, the estimated percentage of marriages ending in divorce is around 42%, nearly one-half of all marriages. 
  • Company Distributions In Specie – Important Considerations
    A company may distribute assets to its shareholders ‘in specie’ if its articles of association permit and the tax consequences for the shareholders are similar in principle to those applicable to a cash dividend. But there are a few ‘twists’ that need to be considered both from company law and tax perspectives, as Ken Moody explains.
  • Bad Debt Relief Record Keeping 
    When a business claims VAT Bad Debt Relief it has to fulfil certain record-keeping criteria – what are they and how long do you have to keep them? Andrew Needham looks at what records a business needs to keep when claiming Bad Debt Relief.  
  • Landlords Finance Costs Restrictions - What's The Latest?
    Until 5 April 2017, individual landlords could deduct their costs, including mortgage interest relief, without restriction, from their profits for tax purposes. Sarah Laing looks at the changes to tax relief on loan relief and the impact they may have on landlords over the coming years.                     
  • New Risk-To-Capital Conditions For Businesses Raising EIS Funds
    What is the new risk-to-capital condition about? The risk-to-capital condition (‘RTC condition’) is a new condition designed to ensure that companies raising finance under the EIS and other venture capital schemes are involved in activities which carry a genuine risk to investors. If the error is only discovered sometime later, what can be done? Satwaki Chanda discusses the new risk-to-capital rules introduced by Finance Act 2018.               
  • Getting To Grips With 3% SDLT Surcharge – Part 2
    In the second of a two-part article, Peter Rayney examines some more thorny issues with the 3% SDLT surcharge. 
  • Too Late To Claim? Not Necessarily! 
    Mistakes can easily happen in tax, some of which may result in an overpayment by the taxpayer. If the error is only discovered sometime later, what can be done? Mark McLaughlin highlights overpayment relief in the context of tax return errors by individuals.              
  • Investors’ Relief: Enhancing ER’s Appeal?  
    In the 2016 Spring Budget, the government announced that the existing capital gains tax (CGT) entrepreneurs' relief (ER) would be extended to certain long-term investors in unlisted trading companies who had subscribed for their shares. Sarah Laing examines the tax advantages of a relatively new relief aimed at providing a financial incentive for investment in unlisted trading companies
    .   
  • VAT: Selling Goods On Sale Or Return 
    Under a sale or return agreement, goods are supplied on terms that allow the customer to return them at any
     point up until the time they are adopted. Andrew Needham looks at tax points for VAT purposes on selling goods on sale or return. 
  • Getting To Grips With The 3% SDLT Surcharge (Part 1) 
    The 3% stamp duty land tax (SDLT) surcharge rules are highly prescriptive and complex. 
    They therefore contain a number of potential traps for prospective buyers of residential property (dwellings). In the first of a two-part article, Peter Rayney examines some of the thornier issues with the 3% stamp duty land tax surcharge.
  • Inheritance Tax: Planning In Family Companies 
    Business property relief (BPR) at 100% is available for inheritance tax (IHT) purposes if an asset, such as shares, constitutes ‘relevant business property’. 
    A chilling thought for many! Kevin Read discusses planning opportunities for maximising business property relief and warns of some of the traps that can cause this valuable inheritance tax relief to be lost.                        
  • Claiming Holdover Relief – Are You Sure? 
    Holdover relief for gifts of business assets is a very useful relief, but it does have limitations and it can be embarrassing if an adviser assures a client that a gain can be held over and then discovers it can’t.  Ken Moody explains a few qualifications to capital gains tax ‘holdover relief’ for gifts of business assets.                      
  • Trading Loss Relief Against Capital Gains 
    Tax planning is as much about ensuring the efficient offsetting of trading losses as it is about maximising post-tax income. Generally speaking, income and capital gains are distinct categories, with each having their own specific legislation, and rarely do their paths cross. Malcolm Finney outlines the utilisation of a little known 'Trading Loss Relief'. 
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