Firstly, may I take this opportunity to wish all readers of this month’s Bite Sized a very Happy New Year and I hope all have managed to survive the UK tax return submission season for another year.
It certainly has been an extremely busy start to the year and this trend looks likely to continue in the run up to the April 2017 changes and beyond. Clients are starting to grasp the enormity of the changes in particular those overseas clients who hold UK property via a non-UK structure (whether directly/indirectly).
A number of contacts have asked to understand what the consequences of not addressing the property holding structures pre 6 April 2017 and whilst each case needs to be reviewed on its individual merits, in basic tax terms, one of the major consequences, will be:
Inheritance Tax (IHT)
Exposure to UK Inheritance Tax under the new rules where an interest in securities (typically shares in a non-UK resident ‘close company’), a partnership, or loan relationship derives its value directly or indirectly from UK residential property.
This results in a number of issues for individuals who hold UK residential property via a structure and swift action needs to be taken in order to review such arrangements to establish the impact of these changes and what options are available to manage the position.
HMRC prosecution figures – 2016
HMRC successfully prosecuted 679 individuals during 2016 securing a combined jail time of 730 years.
Stamp Duty Land Tax (SDLT) – time for the Government to listen?
Research has revealed that the costs of SDLT for a buyer purchasing a home at £2m would cover the rental costs of that property to two and half years! For properties in excess of £5m, this equates to rental payments for four years. Time to remove the punitive 3% SDLT supplemental charge?
UK Government rules out Public Register for Crown Dependencies
An influential Government select committee called for UK Overseas Territories and Crown Dependencies to create a central public register of beneficial owners, which was subsequently rejected by the Government. The Government’s view was reached on the basis that all the relevant territories had signed up to the new global standard on automatic exchange of beneficial ownership information.
I am delighted to announce that I have been named Aviation Lawyer of the Year for 2017. I won’t mention who bestowed such an accolade upon me but needless to say I am neither a lawyer nor do I know the first thing about aviation law! I know that the fuel surcharge didn’t drop in accordance with the price of oil but that’s about the extent of my aviation knowledge. Please do not contact me for any aviation law assistance!
HMRC dismisses expense claims
HMRC has provided a list of some of the crazier expenses claimed in 2014/15 tax returns, including:
- a builder claiming Armani Jeans as protective clothing
- food for a ferocious Shih Tzu guard dog
- international flights for dental treatments
- the cost of regular Friday night bonding sessions in the pub
- a garden shed
- caravan rental for the Easter weekend.
The above remind me of my time at HMRC when a professional footballer claimed the cost of contact lenses as an expense… he was a better player without them… needless to say the expense was denied!