Tax Insider 3 x Newsletter Bundle 

Selling a business can be a complex matter. One point to consider is the VAT consequences of the sale. When a business is sold, it can be either by a share sale if it is a company, or it can be the sale of the trade and assets of all or part of the business. 

Andrew Needham looks at the different ways of selling a business and their VAT consequences.

It’s freezing! The personal allowance and additional rate band

During his Budget speech in March 2021, the Chancellor of the Exchequer, Rishi Sunak, announced that as a part of the various schemes he was introducing to promote economic growth in the UK, both the personal allowance (PA) and the income tax bands would be frozen for the next four years. 

Meg Saksida looks at the impact and practical tips for taxpayers in respect of personal allowances and the additional rate band.

When it’s over: Distributions on cessation of company

Getting through the pandemic has been difficult for all, but it will mean closure of businesses for many. Closure may not be because there is no money in the bank account and no more clients on the horizon; some may have just decided to call it a day. Such companies may have accumulated monies or assets that need to be distributed to shareholders on cessation (after all creditors' liabilities have been settled). 

Jennifer Adams looks at the cost-effective withdrawal of monies from a company on closure.

Incorporation: A matter of preference

The reduction in the lifetime limit for capital gains tax (CGT) business asset disposal relief (BADR) from £10 million to only £1 million was something of a shock, even if, arguably, justified. 

Ken Moody considers the use of preference shares on the incorporation of a business as a way of deferring capital gains tax and maximising the benefit of annual exemptions.

PAYE settlement agreements: Can they help?

A PAYE settlement agreement (PSA) is there to alleviate certain benefits and expenses from having to be declared on either an employee’s form P11D or self-assessment tax return. 

Reshma Johar looks at the potential advantages of PAYE settlement agreements for employers providing staff with certain benefits and expenses.

Anti-avoidance rules on the gift of an interest in a rental property

Owners of investment properties would sometimes like to gift an interest in a property (e.g. to adult children) but retain all the rental income. Their intention is generally to reduce the value of their estates for inheritance tax (IHT) purposes without affecting their standard of living.

Mark McLaughlin highlights an important exception to the inheritance tax ‘gifts with reservation’ anti-avoidance rules on the gift of an interest in a rental property. 

Q&As with Arthur Weller

Corporation tax changes from 1 April 2023: Plan ahead

For the financial year 2021 (which started on 1 April 2021), companies pay corporation tax on their profits at a rate of 19%, regardless of the level of those profits. This remains the case for the financial year 2022 (which runs from 1 April 2022 to 31 March 2023). 

Sarah Bradford outlines how the corporation tax regime is changing from 1 April 2023.

Taking money from your company – tax-free!

It has often been commented that the tax benefits of running a business through a company can be more apparent than real. 

Alan Pink looks at some potential ways of taking money from a company without incurring income tax or capital gains tax.

Tax treatment of capital contributions received by trading companies

Tax professionals often come across capital contributions where an overseas company wishes to inject money into its UK subsidiary or UK affiliate by way of a gift. Typically, they are a method of contributing capital into a company without taking an issue of shares or creating a liability. 

Peter Rayney reviews the legal status and tax treatment of capital contributions received by trading companies.

How a valuable tax relief for companies can be inadvertently lost

The substantial shareholdings exemption (SSE) is a valuable relief for companies. The SSE rules broadly provide that a gain on a disposal by a company of shares in another company (or an interest in shares, or certain assets related to shares) is generally not a chargeable gain, provided two conditions are met.

Mark McLaughlin highlights a situation where an important tax relief for companies may be inadvertently lost. 

Q&As with Arthur Weller

The proposed residential property developer tax: How would it work?

The Grenfell Tower tragedy was horrific, and the disaster forced the government to prioritise the end of unsafe cladding. As a result of this the government is proposing a new time limited residential property developer tax (RPDT).

Meg Saksida considers where the impact of the proposed residential property development tax will be felt.

Buying commercial property through a pension fund: Tax issues

It can be highly tax-efficient to buy commercial property through a pension fund. This is a popular and financially effective option among small business owners who choose to purchase their business premises through their pension scheme to take advantage of the tax breaks on offer and to ensure that they, rather than a third-party landlord, benefit from the rent paid on the property.

Sarah Bradford explores the tax advantages of buying a commercial property through a self-invested personal pension plan or a small, self-administered scheme. 

Capital allowances: The new ‘super-deduction’

The UK does fare well as regards capital investment. Apparently, the World Bank put the UK 104th out of 129 countries for capital investment in 2020 (as a percentage of GDP). In (out of?) Europe, we came fifth-last. 

Lee Sharpe looks at the new super-deduction for capital allowances purposes, points out where investors need to be careful with the new rules, and suggests the real reason why it was introduced.

Residence nil rate band: Is it ‘inherited’?

The family home is the most valuable asset in the death estates of many individuals and could trap some homeowners in the inheritance tax (IHT) net. 

Mark McLaughlin looks at when a qualifying property is ‘inherited’ and ‘closely inherited’ for inheritance tax residence nil rate band purposes.

Q&As with Arthur Weller