Tax Insider Newsletter Bundle

Business Property Relief: The Allowance You Could Quietly Lose

Business property relief (BPR) is a valuable inheritance tax (IHT) relief, despite the restriction in relief at the 100% rate to the first £2.5m of an individual’s relevant business property from 6 April 2026. Above that threshold, the BPR rate reduces to 50%. However, any unused 100% relief allowance can be transferred to a spouse or civil partner.

Mark McLaughlin warns of a potential risk for business owners seeking inheritance tax business property relief and highlights a possible solution.

The difficulties of affording a house and the potential for help from the ‘bank of mum and dad’ are often discussed. Parents may be willing to assist and this will commonly be by transferring money to children and because there is no ‘gift tax’ on such payments, it might be thought that this is the end of the matter. However, there may be inheritance tax (IHT) implications.
 
Richard Curtis considers some of the inheritance tax implications of parents helping their children pay mortgages.

Missed an Input Tax Claim? Can You Still Get the VAT Back?

When a business incurs input tax on its purchases, it’s entitled to reclaim it from HMRC, provided the business has the correct evidence to make the claim.  But sometimes, through an oversight, it isn’t claimed on time; so, what are the rules for claiming back input tax late?

Andrew Needham looks at the procedures for making late claims for input tax.

Gifting Assets: Is It Really That Simple?

In this article, PETs refer to potentially exempt transfers for inheritance tax (IHT) purposes; GWRs refer to gifts with reservation of benefit; and POAT to pre-owned assets tax.

Malcolm Finney considers whether giving assets away is always easy for inheritance tax and pre-owned assets tax purposes.

Property in Your Children's Names: The Plan That Can Backfire

Putting a property in someone else's name can be sensible planning. However, it is not always straightforward, and documentation is key.

Consider the following scenario. A friend’s parents devised a genius plan: uncle needs to clear his mortgage of £200,000. Dad will buy uncle’s flat in Manchester for £200,000 to pay the bank, then let him live there rent-free. To help his two (adult) children, he decided to buy it in their names and instructed his conveyancer to draft the documents. 

Tristan Noyes highlights some of the potential difficulties in transferring a property interest to family members, from both a tax and non-tax perspective.

Business Entertainment: The Deductions Most Businesses Overlook

HMRC has stated that expenditure on business entertainment cannot be claimed as a deduction against profits (and is therefore also non-VAT-recoverable), even if a genuine business expense. 

However, that is not entirely correct – there are exceptions.

Jennifer Adams considers when business entertainment is allowable and circumstances in which it is not. 

Using Trusts to Pay School Fees: The Traps to Avoid

Given the increase in school fees over the last 20-30 years, and more particularly since January 2025 with the application of VAT to such fees, there has never been more incentive to pay those fees in a more tax-efficient manner.

Chris Thorpe outlines some of the potential traps in using trusts to pay school fees. 

Q&As with Arthur Weller

Dividends or bonuses? We can work it out!

Consider the following scenario:

'On a wintry sunny morning, Alan was reviewing his company’s January 2024 management accounts. Alan was the sole director and 100% shareholder of Llandudno Hotels Ltd, which operated two large hotels in Llandudno. The business was on course to healthy pre-tax profit of around £650,000 for the year ended 31 March 2024. Alan had been planning to pay himself a substantial ‘bonus’ before the year-end'. 

What does Alan do?

Peter Rayney examines an owner-manager’s cash extraction following the numerous tax and National Insurance contributions changes.

Use them or lose them: 2023/24 tax allowances

As the tax year draws to a close, it is prudent to review one’s 2023/24 tax allowances and consider whether there is scope for utilising any unused allowances so they are not lost. 

Sarah Bradford explores options for using 2023/24 tax allowances so they are not wasted.

Record-keeping in a digital age

Lee Sharpe looks at taxpayers’ record-keeping obligations in light of HMRC’s inexorable march to digital everything (almost).

Historically, HMRC has been quite relaxed about whether original records must be maintained or digital facsimiles (scans, etc.). 

Trap for business owners seeking CGT incorporation relief

HM Revenue and Customs (HMRC) recently commenced a ‘One to Many’ campaign, targeting taxpayers who incorporated property businesses in the tax year 2017/18 but reported no capital gains tax (CGT) liability in their tax returns on the basis that ‘incorporation relief’ applied in full. 

Mark McLaughlin highlights a potential trap for business owners seeking capital gains tax incorporation relief.

Q&As with Arthur Weller