Tax Insider Monthly Newsletter

The term ‘income shifting’ is used to describe the transfer of income-producing assets between family members (usually spouses or civil partners) either where one pays income tax at a lower marginal rate than the other, or to ensure that personal allowances are fully utilised. Income shifting (or splitting) is a legitimate form of tax planning, provided you are careful not to trigger any anti-avoidance rules.

Jennifer Adams considers the tax implications of transferring income producing assets between spouses.

The rent-a-room scheme is an optional tax exemption scheme, which allows individuals to receive up to £7,500 of tax-free gross income (i.e. income before expenses) from renting out spare rooms in their only or main home. 

As the Coronavirus continues to impact on household incomes, Sarah Laing points out that renting out a spare room can provide a tax-free cash boost.

The deadline for submitting the return online and paying HMRC are usually the same - one calendar month and seven days after the end of an accounting period. One day late and a default will be recorded.  

Andrew Needham looks at the consequences of submitting a late return or not sending one in at all.

A major, yet fairly basic, part of income and corporation tax planning consists of the efficient use of losses, i.e. offsetting those losses against other profits. Many of the infamous tax avoidance schemes involved the (artificial) creation of losses to offset against other income and thus reduce or claim back tax. 

Chris Thorpe offers an overview on the tax-efficient use of losses for tax purposes.

Tax return filing season is well and truly here. Unfortunately, many individuals within self-assessment will submit their return after the filing deadline (i.e. normally 31 January after the end of the tax year) and face a penalty from HM Revenue and Customs (HMRC).

Mark McLaughlin looks at when penalties for late tax returns might be set aside due to a reasonable excuse for the late filing.

The statutory residence test (which took effect in April 2013) has made it possible to ascertain, with reasonable certainty, whether you are resident or non-resident in the UK for a particular tax year. 

Kevin Read reminds readers of the anti-avoidance rules affecting temporary non-residents.

Inheritance tax (IHT), contrary to popular belief, is not a death tax but a gift tax, which means that a taxpayer can be taxed in life as well as on their estate at death. 

Meg Saksida explains which gifts should be free from inheritance tax consequences this Christmas.

It is worryingly easy to inadvertently incur penalties for non-compliance with tax obligations. The eye-watering powers of HM Revenue and Customs (HMRC) are underpinned by penalty regimes for non-compliance with various statutory requirements.

Mark McLaughlin looks at how penalties for tax return errors can be reduced or eliminated in certain circumstances.

As we know, the Covid-19 crisis has meant that many employees are now working from home. There is already evidence of the environmental and commercial advantages of homeworking, but many employers have also said they are experiencing improved productivity and other positive benefits stemming from employees having a more balanced work/home lifestyle. 

Sarah Laing looks at some tax aspects of homeworking, which have become particularly relevant due to Covid-19.

If a business is renting or selling a commercial property it will be making an exempt supply (unless it is selling a commercial property less than three years old, in which case it is automatically standard rated).  

Andrew Needham looks at when to opt to tax a property for VAT purposes and when it is not necessary.

You’d think you’d know a van when you see one – it’s a van, after all! 

Chris Thorpe reviews the position of vans and benefit-in-kind charges in light of the recent Court of Appeal case which held that VW Kombis and Vauxhall Vivaros are actually cars.

Landlords buy investment properties for a variety of reasons, but at some time or other a decision has to be made as to the disposal of the property. Should the owner wish to gift the property to another family member there are tax implications to consider. 

Jennifer Adams examines what you need to consider when gifting investment properties to your children.

Whether re-surfacing work is allowable revenue expenditure or extra capital expenditure on the land will depend on whether it can be seen to enhance the working area or value of the site.

Kevin Read reviews recent case law on re-surfacing land.

The pensions allowance rules changed from 6 April 2020; Meg Saksida explains how pensions savings can be extremely tax-efficient.

Tax compliance is difficult and complex. Making a mistake in a tax return is a distinct possibility for many taxpayers.

Mark McLaughlin looks at how penalties for careless errors in tax returns can be suspended and ultimately cancelled.

Qualifying individuals are eligible to open a lifetime individual savings account (LISA) in the same way as opening a regular ISA and contribute up to £4,000 each year, with the government providing a 25% bonus on contributions at the end of each tax year up to the age of 50. 

Sarah Laing looks at the benefits of opening a lifetime ISA and flags up an important recent change.

Under current UK VAT law, the standard rate of VAT (20%) applies to all supplies of restaurant services, hot takeaway food, holiday accommodation and admission to many attractions.  

Andrew Needham looks at the implications of the temporary 5% VAT rate for the hospitality industry.

The divide between solicitors and accountants has been getting fuzzier over the last 20-30 years; it is certainly not a new question. 

Chris Thorpe looks at the differing services which a solicitor and accountant can offer for tax planning.

For UK tax purposes all sources of rental income, be they commercial or residential lets, furnished or unfurnished, are regarded as being derived from the same single property rental business, except for furnished holiday lets (FHL), which are kept separate. EU lettings and EU FHL are also separate activities.

Jennifer Adams considers the date on which a property business ceases to trade.

Where people act as personal representatives (PRs) for those who died in the months leading up to the coronavirus pandemic, there is a good chance that they will be realising assets for less than their value at death.  

Kevin Read explains how personal representatives can save inheritance tax where quoted investments or land have lost value.

Tax allowances for children have been around since 1798 and are a very welcome contribution to most UK households. In its modern form, child benefit was phased in from 1977 to 1979. 

Meg Saksida considers the workings of the high income child benefit charge.