Hello,
The Transactions in Securities (TiS) rules cast an extremely wide snare. In a nutshell, they seek to block Capital Gains Tax (CGT) relief where a shareholder seeks to gain an Income Tax advantage on a disposal of shares (or securities). The First Tier Tribunal (FTT) has released its judgment in a fascinating TiS case.
The case (see 'TiS blocks EIS disposal', below) featured some very careful and extensive tax planning, also involving a share-for-share exchange to maximise Capital Gains Tax (CGT) relief on the buy-back of Enterprise Investment Scheme (EIS) shares. 'Quixotic' is a useful adjective when it comes to describing HMRC's arguments in the case! Was the FTT too literal in its analysis? Check out our summary. One thing is certain, there will be a lot of detailed analysis of the judgment in the coming weeks and months.
The runners are out of the blocks...and so the general election starts. The calling of an early general election on 4 July means that there will be no new announcements in tax for over two months. That comes as quite a relief, as it goes. You would not believe how many of our tax guides need to be altered when the new rules, in whatever shape or form they will take, are introduced for Non-domiciled individuals and the Remittance Basis. We have created a handy briefing on the current proposals, we recommend that these are shared with clients who might then have an idea of what they might expect in 2024/25. Of course, they may well be modified depending on who wins the election and if stakeholders pressure for changes during consultation.
There is another Agent Update just out, these are always a good read. We have another selection of tax and non-tax cases that we think you will like and lots more.
Just one more thing to say: save the dates June 11th and 12th. We are holding two mornings of sessions. Topics will include 'How to run the most tax efficient business...ever 2024/25'; this is the enhanced version of our talk at Accountex 2024. This combines a general tax update for 2024/25 with a review of several topical business models. 'Anti-Money Laundering: making your firm-wide risk assessment' takes a look at what's new in AML and company reporting.
Subscribers can always commission new guides from us, Campsites and Caravans is just such a guide.
More news and cases below.
Nichola & the Team
Your Virtual Tax Partner®: online PRACTICAL support for accountants, tax advisers BY accountants and tax advisers.
Quick News (Freeview)
Agent Update: May 2024
HMRC have published Agent Update 120 for May 2024. Here is our summary of the highlights of direct and indirect tax announcements affecting SME owners and advisers.
Early election pauses non-dom and other reforms
The Prime Minister Rishi Sunak has announced that the general election will be held on 4 July 2024. As a result, ongoing live consultative work with stakeholders will be paused during the pre-election period. 2024 is another interesting year for tax advisers and it's highly probable that any winner of the election will hold an Autumn budget.
FHL simplification test rejected
HMRC have rejected the proposal that a 'brightline test' could be introduced when the Furnished Holiday Letting (FHL) regime is abolished in April 2025. The idea was that a simple test could set criteria to assist taxpayers in establishing the boundary between property letting and trading, a topic that has foxed both taxpayers and tax tribunals for decades.
Applications open for Welsh 'future-proofing' grants
Applications are open to businesses for grants of up to £10,000 from the Welsh government's Future Proofing Fund. The fund will provide eligible micro, small and medium-sized businesses in the retail, hospitality and leisure sectors with a discretionary grant to be invested in measures to future-proof the business.
Football agents' fees and contracts
HMRC have issued 'Help with football agents' fees and dual representation contracts'. These are guidelines on dealing with fees charged by football agents when a player transfers from one club to another or when a playing contract is negotiated with their current club.
Tax Cases (Freeview)
TiS blocks EIS disposal
Attempts to claim EIS disposal relief on share buybacks was denied by the First Tier Tribunal (FTT). The FTT determined that the Transactions in Securities (TiS) legislation applied because the main purpose of the transaction was to obtain an Income Tax advantage.
Was the DLA written off? A cautionary tale
When is a loan write-off, not a write-off? One of the oddest Income Tax appeals so far this year concerned a director's claim that his loan has never been written off. The First Tier Tribunal (FTT) found a muddled trail and concluded that company records and minutes were falsified and no write-off had ever occurred.
High Court saved uncertain charitable gifts
The High Court intervened to interpret a will where a number or charities that were the subject of gifts were incorrectly named. In all cases, the court identified a suitable body to receive the gift left in the will, with the result that none of the gifts failed.
Editor's Choice
Non-Domiciled Individuals and Remittance Basis: Spring Budget 2024 proposals briefing
What is being proposed for the non-domicile tax regime? The current version of the Remittance Basis will be abolished on 5 April 2025 and replaced with a new regime.
Finance Act 2024: Tax Update & Rolling Tracker 2024/25
This rolling planner tracks the key tax announcements that impact the 2024-25 tax year and beyond. This planner is updated on an ongoing basis.
Guides & Updates
Self-Employed
Campsites & Caravans: Tax Overview
UPDATE: What expenses can campsite owners claim for tax purposes? How is income taxed? Are there special tax and accounting rules when land is used for camping on a seasonal basis? Can you obtain Capital allowances on caravans and campervans? What are the VAT rules?
Partnerships
When does a partnership exist?
When does a partnership exist? Why does it matter? What are the implications for different taxes?
Directors & Companies
Purchase of Own Shares...out of capital
This is a different procedure to a purchase of own shares made out of distributable reserves: we explain how.
Issuing different share classes to family members
A guide examines the tax consequences of creating new share classes in a family company in order to split income with a spouse or close family members.
Employers
Payrolling of benefits
Are you getting ready for the change? The value of certain taxable Benefits In Kind can be included in taxable pay when calculating the PAYE deducted from payments of wages and salaries to employees. This becomes mandatory next year.
Land & Property
Advisers' Guide to Property Business' Profits and Losses
UPDATE: Our very handy summary and refresher for advisers. 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?
Furnished Holiday Letting
UPDATE: What is Furnished Holiday Letting? How do you qualify for Furnished Holiday Letting? What are the rules for Furnished Holiday Letting?
Private Client & Estate Planning
Trusts & Estates: what's new 2024/25
UPDATE: New helpsheets on updating trust details on the Trust Registration Service (TRS).
Named tax avoidance schemes, promoters, enablers
UPDATE: HMRC publishes a list of named tax avoidance schemes, promoters, enablers and suppliers. It is not recommended that taxpayers use any of these schemes, as HMRC does not consider that they work and you may end up with a significant tax liability if you engage with the scheme suppliers.
Capital Allowances
Cars, Vans & Other 4 wheel vehicles: Allowances
What capital allowances are available for vehicles? How does HMRC classify what is a car or what is a van?
Disposal values & rules
What is a disposal for capital allowance purposes? What is the tax consequence of a disposal? What value needs to be accounted for on a disposal?
Penalties & Compliance
Overpayment Relief
What is Overpayment Relief? When can you claim Overpayment Relief? What are the conditions for a claim for Overpayment Relief? What are the time limits for a claim for Overpayment Relief?
Penalties: Failure to Notify
What tax penalties apply if you fail to notify HMRC that you are chargeable to tax? Can they be appealed or reduced?
VAT News & Cases
Gold bullion scheme escapes VAT fine
An appeal against a £14m penalty for failure to meet VAT record-keeping requirements on the physical delivery of gold bullion was successful. The Upper Tribunal (UT) agreed that there was no delivery of any bullion and therefore no record-keeping requirement relating to delivery.
Energy-Saving Materials
UPDATE: The supply and fitting of energy-saving materials in residential accommodation attracts the zero rate of VAT. What does it apply to? What are the qualifying conditions? What case law is there on this topic?
Agents and principals
What is an agent for VAT purposes? What is a principal? When do the agency rules apply?
Tax Tools & Calculators
Tax tools & calculators
UPDATE: 2024/25 versions available now. We have a suite of useful tax tools that help agents, business owners and sole traders calculate their taxes.
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
- NEW: CPD: Change of basis periods: Transitional rules 2023-24 Returns
- CPD: VAT Penalties Update
- CPD: CGT Reporting and payment deadlines
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 16 May 2024
- Consultation on the Penalties for Failure to Pay Tax
- Postmaster tax exemptions for Post Office compensation schemes
- Ex-chancellor admits carelessness with own tax
- Late HMRC enquiry allows flawed post-cessation trade relief
- Undue influence sees Will set aside
- Revenue and Customs Brief 7 (2024): VAT Treatment of Voluntary Carbon Credits
- A company disposal? Start here...
- A sale of the company's trade & assets? Start here...
- Sole trader v. limited company: Tax differences & savings (2024/25)
- LLP v Company: which will save me tax?
- Salary 2024/25 (interaction with NICs) NEW
- Reporting deadlines in 2024/25 UPDATE
- Capital taxes round-up: 2024-25 NEW
- Self Assessment Return 2023/24: What's new? NEW
- Land & Property: an Adviser's Tax Update 2024-25 NEW
- What expenditure qualifies for plant & machinery allowances? UPDATE ...More
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