A company purchase of own shares (CPOS) is often a tax-efficient way for an individual shareholder to dispose of their shares (e.g., on retirement). However, unexpected tax consequences can arise if a CPOS is not handled correctly. Income treatment As a general rule, when the company buys back its own shares from the shareholder, any… Read More »
How much are your assets worth? Some asset valuations (e.g., quoted shares) are relatively straightforward; others might cause disagreements with HM Revenue and Customs (HMRC). What is ‘market value’? For example, when valuing a chargeable lifetime gift of a property for inheritance tax (IHT) purposes, or a property on an individual’s death, its market value… Read More »
Business owners want their enterprise to be successful and financially rewarding. Unfortunately, this is not always the case. If the business fails, HM Revenue and Customs (HMRC) may miss out on unpaid tax liabilities. However, in some cases business owners may be unable to walk away and start new businesses with a clean tax slate.… Read More »
Many individuals who are concerned about inheritance tax (IHT) being payable on their death estates will undertake IHT planning in their lifetimes. Income tax – on IHT planning! However, in some cases this will result in an income tax charge instead. Even if no IHT planning is undertaken, this income tax charge can still bite… Read More »
Taxpayers must play by the rules. HM Revenue and Customs (HMRC) enforces its vast powers to ensure this is so. Thankfully, those powers invariably also give taxpayers some degree of protection. For example, HMRC may require information and documents ‘reasonably required’ to check a taxpayer’s tax position. HMRC may impose penalties if the taxpayer fails… Read More »
Business asset disposal relief (BADR) offers a capital gains tax (CGT) rate of 10% on net chargeable gains of up to £1 million (for 2022/23). A claim for BADR is available on a material disposal of business assets, such as an individual’s company shares, where certain conditions are satisfied. Trading company? For an individual shareholder… Read More »
Relief on the disposal of a private residence (or ‘principal private residence (PPR) relief, as it is commonly known) is sufficient to shelter gains on the disposal of an individual’s only or main residence from capital gains tax in most instances, where the qualifying conditions are satisfied. Is it permitted? One of the limitations in… Read More »
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). Excuses, excuses… However, there is an exception from late filing penalties if… Read More »
It is not uncommon for the owner of an investment property (e.g., a parent) to wish to transfer rental income (e.g., to adult offspring) but retain ownership of the property. However, the tax implications need careful consideration. How much to give away? For example, the gift of a property interest is treated as a disposal… Read More »
The basic rules for allowable expenditure by sole traders and partnerships (or companies) appear straightforward, at least on the face of it. Profits of the trade are calculated in accordance with generally accepted accounting practice, subject to any adjustment required or authorised by law. Is it allowable? For the purposes of calculating profits for tax… Read More »