Hello,
We have news of a couple more U-turns from HMRC this week, on advice for landlords and in respect of phone line closures. We also feature a handy set of 'top-tips' for Owner Managed Businesses (OMBs) and Private Clients which also factor in changes that are coming up on 6 April.
As the end of the tax year approaches we have seen a surge in queries on the tax residence tests, rules for gifting shares to the family and on the date of disposal for residential property. The reduction in the higher rate of Capital Gains Tax (CGT) for residential property combining with the removal of multiple dwellings relief for Stamp Duty Land Tax (SDLT) create competing issues for sellers and buyers. This must be extremely stressful for those affected.
Landlords who received HMRC's December 2023 One-To-Many letter regarding repair and maintenance expenses should know that HMRC has acknowledged the letter contained misleading advice. In a policy change on tax relief for landlords, the costs of replacing a boiler with a more efficient model is now confirmed as a repair and not capital expenditure.
This change of approach is not illustrated terribly well by the property section of HMRC's Business Income Manual. The revenue v. capital divide of repairs and renewals remains a confusing area for landlords, as it has been based on case law. Advisers may be interested to know that apparently HMRC also no longer insists that all repairs and renovations made between tenancies are capital.
Football appears twice in our news this week. We feature a case that considers tax relief on football agent fees and the government has issued the Football Governance Bill. This featured so much in the news that we thought we would summarise it. The Bill introduces an Independent Football Regulator (IFR), strengthens owners' and directors' tests, and introduces backstop powers and provisions for fan engagement, all in a bid to improve the financial sustainability of clubs and safeguard the heritage of English football.
More news and cases below.
Back soon
Nichola & the Team
Your Virtual Tax Partner®: online PRACTICAL support for accountants, tax advisers BY accountants and tax advisers.
Quick News (Freeview)
Landlords: Boiler upgrades are allowable repairs
HMRC revises its view: a new boiler can be considered an allowable expense against rental income, even when it constitutes an upgrade driven by advancements in technology.
Time to claim child benefit again?
Changes to the income thresholds for the claw-back of child benefit coming into force on 6 April 2024 mean that some higher-income parents should reapply to have child benefit reinstated.
HMRC U-turn on helplines
Just one day after announcing a restriction to its VAT, Self Assessment and PAYE helplines, HMRC had a change of heart.
Additional information requirements for OMBs
HMRC has published draft regulations regarding the additional information employers, shareholders in Owner-Managed Businesses (OMBs) and self-employed individuals will be required to provide to HMRC from 6 April 2025.
The Football Governance Bill
The government has published draft legislation which will establish the Independent Football Regulator; make provision for the licensing of football clubs; make provision about the distribution of revenue received by organisers of football competitions; and for connected purposes.
G20 chair puts global personal wealth tax on the table
A two per cent minimum wealth tax on billionaires has been proposed to G20 members by the chairman of the G20, Brazilian Finance Minister Fernando Haddad. Based on research from the EU Tax Observatory, he said the primary aim of the proposed tax would be to tackle rampant tax evasion.
Tax Cases (Freeview)
Preliminary steps not binding for CGT relief
An attempt to claim Entrepreneurs’ Relief on a disposal of goodwill to a close company was denied by the First Tier Tribunal. It was found that there was no unconditional contract to sell the business prior to 3 December 2014.
Football agent's fees not deductible
Footballer Baye Oumar Niasse's appeal for a deduction of fees paid to his agent failed at the First Tier Tribunal (FTT). The fees were not deductible under the general employee expense rule nor the special rules for entertainers.
A POEM but not in so many words
The Upper Tribunal (UT) confirmed that family trusts that had engaged in a tax planning arrangement known as the 'round the world' scheme were not based in Mauritius at the time of a disposal for Capital Gains Tax (CGT) purposes and the gains were properly taxable in the UK, the actual place of effective management (the 'POEM').
Editor's Choice
Year-end Top Tips for OMBs 2023-24
A last-minute year-end tax planning advice for owner-managed businesses and clients. What should you focus on as the end of another tax year-end approaches? What should you do before 5 April and what could you leave until later?
Basis Year Reform
2023/24 is the transitional year. Do you need to act now? What is basis period reform? Who is affected? What are the transitional rules?
Guides & Updates (subscription content)
Self-Employed
Repairs and Renewals
What expenses can you claim for tax? In what situations are repairs disallowed and treated as capital expenditure?
Partnerships
Starting a partnership? Start here...
This freeview 'At a glance' guide is essential reading for anyone thinking about starting up a new partnership.
Directors & Companies
Loan relationships
When are loans within these rules? What happens when you write off a connected party loan?
How to gift shares to the family
How can you gift your private company shares to members of your own family? What are the tax implications? What reliefs apply?
Family Investment Companies
Many families and High Net Worth Individuals (HNWIs) use corporate structures as a vehicle for holding and making investments commonly known as Family Investment Companies (FICs).
Employers
Employment tax: Reporting, dates & deadlines 2024-25
What are your key deadlines and additional considerations for the end of the 2023-24 tax year.
Private Client & Estate Planning
CGT: Date of acquisition or disposal
UPDATE: Contracts for residential property exchanging before 6 April 2024 will be at the higher rate. Worth delaying exchange? When is the date of acquisition or disposal of an asset for Capital Gains Tax (CGT) purposes?
Land & Property
Advisers' Guide to Property Business Profits and Losses
What is property income? How is it taxed? How are profits calculated? How are losses relieved? Is National Insurance paid on property income? Is property income classed as a business activity?
Stamp Duty Land Tax
SDLT: Multiple Dwellings Relief
UPDATE Spring Budget 2024: What is Multiple Dwellings Relief (MDR) for Stamp Duty Land Tax purposes? When does it apply and how is it claimed?
SDLT: First-time buyers
UPDATE Spring Budget 2024: When Stamp Duty Land Tax (SDLT) relief is available to first-time buyers? What qualifying conditions must be met?
Overseas & Residence
SRT: Statutory Residence test
What is the statutory residency test? Why is it important and how does it work? Our subscriber guide to the SRT.
SRT Toolkit
Our freeview interactive tool to determine residence status.
SRT: Split Year Treatment
Our guide to what Split Year Treatment is and when it applies.
Tax Tools
Tax calculators
UPDATED for NICs changes: FREE for subscribers: We have a suite of useful tax tools that help agents, business owners and sole traders calculate their taxes.
Tax Tools
FREE add-on for subscribers, or available separately
Calendar of tax deadlines and new tax measures
UPDATE: This is a freeview 'At a glance' rolling calendar of common recurring tax deadlines, new tax measures and other tax-significant events.
CPD for Lunch
Byte-sized chunks of lunchtime CPD for subscribers
- CPD: VAT Penalties Update
- CPD: CGT Reporting and payment deadlines
- CPD: Corporation Tax Part 1: Rates and Challenges
More at CPD Index
CPD Workouts
Two hours of CPD: Unravelling the diverse tax rules over a range of topical subjects
- VtaxP Tax Workouts 2023: AML Essentials update & IHT and Family Investment Company case studies
- VtaxP Tax Workouts 2023: Tax Update for OMBs & Taxing the Digital Nomad
Tax Queries?
UK Agent for registration of Overseas Entities
Do you require assistance in the registration and verification of an overseas entity that owns UK land or property?
Virtual Tax Partner© Support
Have a tax query? Need a second option? Open a ticket and ask a question. A team of tax experts with a very wide range of expertise: covering direct and indirect tax, as well as accounting, R&D claims, reorganisations and much more.
Missed Last Time's Web-update?
Nichola's SME Tax W-update 14 March 2023
- Tax Administration and Maintenance Day
- Spring Budget 2024: At a glance
- UK ISA consultation
- Change to reporting of salary advances
- Cryptoassets: views sought on new domestic reporting
- Raising Standards in the Tax Market: Tax Registration
- COVID SEISS Claim Rejected
- Not fishing: information was reasonably required
- A tax planning index: directors (our top picks)
- Succession or Management Buyout? (subscribers) UPDATE
- Construction Industry Scheme (CIS) UPDATE
- High-Income Child Benefit Tax Charge UPDATE
- Tax Planning for the 2023/24 year-end: Private Clients UPDATE
- Business Rates: What's New? UPDATE
- Non-resident trusts UPDATE
- Non-domicile status, deemed domicile & tax UPDATE
- Checklist: Year-end Accounts & Tax (self-employed) ...More
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