Hello
This time we have our latest Land and Property update, we also review the latest Agent update, plenty of topical case law and there are a few reminders.
We do not usually report cases from the Lands Tribunals, however we do take an interest when appeals go to the Upper Tribunal and concern valuations for IHT. Accurate valuation for probate is key to 'paying the right amount of tax'. Valuation is often considered more an art than a science and as the cases below show, with the IHT rate of 40% and the possibility of penalties for carelessness HMRC may well challenge valuations on even quite modest properties.
Other highlights of this edition, apart from the Land and Property Update and new CPD of that name, include a useful SDLT case if you are feeling geeky and we have made a feature of HMRC's facility that allows you to report Capital Gains online and nearly in 'real time'.
If you have clients with unsettled EBTs then now is the time to start addressing the problem.
Finally, we have been asked about GDPR compliance and have created a statement that you can use or modify in your business. The Information Commissioner was on the radio last week, and my understanding is that if you are not compliant you will not face fines, however you will be educated appropriately.
If you have any tax queries please do try out our Virtual Tax Partner support portal at www.VtaxP.co.uk: subscribers you are entitled to free quick queries so do ask.
Enjoy the guides and updates and the news is below.
Back soon
Nichola Ross Martin FCA Tax Director
Your Virtual Tax Partner®: online PRACTICAL support for accountants & tax advisers BY accountants & tax advisers
Quick news (freeview)
Requirement to correct and Employee Benefit Trusts
Under the new Requirement to Correct (RTC) rules, undeclared UK tax liabilities in respect of offshore matters will face harsh penalties if they are not dealt with by 30 September 2018, and these rules may apply to Employee Benefit trusts and other remuneration trusts.
Avoid property fraud using Land Registry property alerts
The Land Registry have paid out nearly £60million in recent years as compensation for people who have had their homes stolen, set up an update now for you and dependent relatives.
Agent Update April / May 2018
HMRC have issued the Agent Update for April/May 2018. We have summarised the key content for you with links to our detailed guidance on the topics covered.
GDPR: Statement of Compliance
NEW: This is a statement on GDPR compliance, it may be suitable for an accounting and tax practice. The tax and accounting bodies are jointly preparing wording for inclusion of letters of engagement and we will update when they publish their wording. Please feel free to use this or modify it as you like.
Case Update (freeview)
No SDLT higher rate relief for B & B purchase by pub
In Goode Cuisine Company Limited v HMRC TC06416 the FTT considered whether relief from the SDLT higher rate charge could apply when a pub purchased a dwelling for conversion for use in its trade. It decided not, the act of conversion changed the nature of the property.
Hope value extended in probate valuations
In Palliser v HMRC [2018] UKUT 0071 (LC) a Lands Chamber case, the Upper Tribunal found that a property in need of modernisation but with great potential should have been valued for IHT purposes with hope value included.
The importance of professional valuations for IHT
In Mrs Dorcas Adebowale Akanwo (as Personal Representative for the estate of Miss Taiwo Akanwo Deceased) v HMRC [2018] UKUT 0113 (LC) another Lands Chamber case, the Upper Tribunal upheld HMRC’s valuation of a terrace house of £260,000 compared to the value taken by the executor of £200,000.
Editor's Choice (subscribers)
Land & Property: an Adviser's Tax Update April 2018
NEW: all the latest changes, news, cases and hot topics relating to Land and Property.
Reporting capital gains (FREEVIEW)
NEW: capital gains can be reported through Self-Assessment or using HMRC's real time service.
R&D: Staff costs & Subcontractors & Reimbursed Expenses
UPDATE: clarification of how the enhancement relief applies to subcontractor costs which are restricted to 65%.
Tax Guides and Updates (subscribers)
How to tax UK residential property (FREEVIEW)
There have been a number of recent changes in the taxation of income and gains arising from UK residential property, here are a selection of topical guides.
Annual Tax on Enveloped Dwellings (ATED)
Do not forget that the ATED return, relief declaration, and payment is due by 30 April 2018. The amount due will be based on the 1 April 2017 valuation, or cost if acquired after 1 April 2017.
SDLT & Residential Property
SDLT only applies to properties in England, Wales and Northern Ireland; the Land and Buildings Transaction Tax (LBTT) replaced SDLT for properties in Scotland from 1 April 2015. Wales introduced the Welsh Land Transaction Tax (LTT) on 1 April 2018.
VAT (freeview)
No UK Fixed Establishment leads to VAT recovery
In Hastings Insurance Service Limited v HMRC [2018] TC06306, the First-Tier Tribunal (FTT) concluded the Gibraltarian company to which brokering services were provided did not have a UK fixed establishment, the supply was not exempt, and VAT was recoverable.
New college building should be zero-rated
In St Brendan’s Sixth Form College v HMRC [2018] TC06384, the First-Tier Tribunal (FTT) agreed with the taxpayer that a new block at the college was independent of the existing buildings and the construction costs were zero-rated.
VAT (subscribers)
Bad debts: VAT recovery
UPDATE: for recent case law on the conditions for claiming bad debt relief.
VAT: Land & Property (notes)
UPDATE: comments on annexes and when their construction qualifies for zero-rating, including case law on this area.
CPD Webinars
New CPD click here - this time: Land and Property Update
Missed last time's update?
Nichola's SME Tax w-update to 19 April 2018
Features:
- Employer's Bulletin
- P11D Top Tips
- SEIS and EIS: can directors and employees qualify for relief?
- Tax Planning for Directors 2018/19
- and much more..
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