SME Tax News

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This week we take a closer look at the Budget announcements affecting Personal Service Companies (PSC), we have a VAT update and for some reason we all decided to report IHT cases.

In Viscount Hood (Executor of the estate of Diana, Lady Hood deceased) v HMRC [2018] EWCA Civ 2405 the Court of Appeal concluded that IHT planning whereby the taxpayer granted a sub-lease to the her sons failed. The presence of covenants which passed on the donor's obligations under her head lease, created a gift of property subject to a reservation of benefit.

HMRC have published ‘Amendments to tax returns’, a call for evidence aimed at providing an understanding of issues faced by taxpayers who are amending returns.

HMRC has published a new consultation ‘The Taxation of Trusts: A Review’ considering whether the current system for taxing trusts meets the principles of transparency, fairness, neutrality, and simplicity.

In HMRC v Parry and others [2018] EWCA Civ 2266 the Court of Appeal held that a failure to exercise pension rights and a statement of wishes leaving death benefits to the deceased’s sons were both transfers of value and IHT was due on the entire pension fund.

The Chartered Institute of Taxation's (CIOT) has criticised last week’s Budget for the number of tax measures announced as ‘done deals’ without having been consulted on, and for excessive ‘tinkering’.