Tax

TQOTW: SHARE REDUCTION

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My client originally subscribed for 50,000 £1 shares when he set up his company. He now feels that the company is over capitalised and would like to return some of the share capital back to himself. He wonders whether the company could enter into a share buy-back or alternatively perhaps he could simply cancel some of the shares and receive the original capital.

Tax Relief Webinar | Misconceptions Debunked

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Following on from our recent webinar where we looked at a general overview of R&D, Capital Allowances and Patent Box Tax Reliefs, the next in our series of webinars will delve deeper into each relieves and as the title suggests, debunk some of the most common misconceptions.

The webinar will be hosted by Derek Granger from Croner Taxwise and Nigel Holmes from Catax. We will be discussing the following areas.

R&D
• Impact with grants
• Not doing R&D – the man in the white coat mentality
• Too good to be true/will trigger an enquiry

CA
• It is just a timing difference as it increases a future capital gain
• Out of time
• It requires an alteration to the accounts

Patent Box
• Complexity
• Patent is in the wrong name
• Not suitable for loss-making companies
• Not as generous as initially thought

This will be followed by a Q&A session.

Sign up for the webinar below. We hope you can join us for what promises to be a very informative webinar.

Register Now

TQOTW: ENTREPRENEURS RELIEF FOR NEW INCORPORATIONS

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I understand that Entrepreneurs Relief is now given for new incorporations so that, on incorporation, an existing sole trader would immediately meet the qualifying conditions even though they would not have owned shares in a qualifying company for a sufficient period. Is this correct?

TQOTW: DATE OF SEPARATION FOR CGT

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Jack and Jill started living apart in November 2018 but there was then no contemplation of a divorce. In May 2019 they discussed their situation and at that point in time decided to get divorced. They agreed to get divorced in January 2020.
In June 2019 they agreed a plan to transfer assets between themselves before 6 April 2020 as part of the divorce settlement. The proposed transfers include a large property with a market value of £1 million which originally cost £200,000 many years ago and which Jack will acquire from Jill. She is concerned about the CGT implications.

The property being disposed of by Jill shows a gain of £800,000 based on market value. Jill is seeking to rely on a transfer of assets between spouses who are living together is treated as taking place for such consideration as will give neither a gain nor a loss to the transferor by virtue of s 58 TCGA 1992.

TQOTW: P11D’S & PAYROLLING BENEFITS

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With the 2018/19 P11D deadline looming, should I be considering payrolling benefits in future? What is the advantage? What do I need to do and when?

TAX IMPLICATIONS OF WORKING FROM HOME

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Working from home offers all kinds of benefits, from the opportunity to create the perfect environment in which you can be most productive, to the improvements to work-life balance that come with ditching the commute.

TQOTW: CAPITAL GAINS

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My client owns a joint share in the freehold of a building which consists of five flats. One of the flats is occupied by my client under a 999-year lease.
The freeholders are to grant a new long lease over another flat in the building. My client understands that this will be a capital gains disposal event, but has queried whether a measure of principal private residence relief would be due to him, given that the disposal is out of the freehold interest he owns that includes his main residence.

Can you please confirm how to approach my client’s capital gains position, whether any main residence relief would be due to him in these circumstances and how this would be calculated?

TQOTW: PROFESSIONAL FEES

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My clients have inquired about the possibility of claiming relief for expenses incurred in connection with closing down their company. In particular, they would like to know whether they could get tax relief for professional advice that they have taken and whether they can arrange for the company to make pension contributions on behalf of employees.

TQOTW: PPR – SELLING NOW OR DELAYING

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This question is based on a call to the Advice Lines where a client never had the intention to be a landlord for very long. He had fallen into those circumstances because it had been difficult to find a buyer for his property when he moved home – not an uncommon situation. His hesitation to sell the property once the market improved resulted purely from the mortgage redemption fee that would be triggered.

TQOTW: ENTREPRENEUR’S’ RELIEF

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We recently received a question to the advice lines regarding a family company and the availability of entrepreneur’s’ relief (ER) with regard to different classes of shares in issue.
A total of 11,000 shares are in issue made up of A and B shares. Mother and father own 10,000 A shares and their adult child owns the other 1,000 B shares.

The A shares have full voting rights, full dividend and full rights on disposal of the company. The B shares have full voting rights, full dividend and no rights on disposal of the company.

Tax Insider April 2019

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Included in this month’s article:
– GOVERNMENT CONSULTS ON NEW STAMP DUTY SURCHARGE
– THOUSANDS FACE HUGE TAX AVOIDANCE BILLS
– MINISTERS GIVE THUMBS-UP FOR PROBATE REVAMP
– APPRENTICESHIP ‘STARTS’ FALL BY A QUARTER

TQOTW: DEEMED DOMICILE & AUTOMATIC REMITTANCE

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My client is a long-term resident of the UK for tax purposes. However, she is non-domiciled and has been using the remittance basis for her foreign income as it is below £2,000. As she will now have been here for 15 of the previous 20 tax years, will she be caught by the Deemed Domicile rules?

TQOTW: THE NATIONAL MINIMUM WAGE AND NATIONAL LIVING WAGE

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Our pay period runs one week in arrears and we are due to pay employees on Friday 5th April for the work that they did during the week 25th – 31st March. What rate of pay should they be paid at, as we are aware that the National Living Wage rate has increased?

TQOTW: Irrecoverable Loans

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My client has made a directors loan to his personal company (he is the majority shareholder) which now cannot be repaid. Is there a loss for CGT and if so, is it a ‘clogged loss?’

TQOTW: Electric Car Charging

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My client is an expanding local mobile care business and they are increasingly aware of the pollution that cars emit into the environment. With this in mind, they have been asked by their team whether they can look at changing the company cars to hybrid or electric cars and whether there are any incentives to do so.

Here we look at some of the recent changes and existing exemptions that may help them to make their minds up.

The politics of tax breaks

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If there’s one thing accountants love, it’s identifying obscure tax reliefs to which you may be entitled and using them to reduce your tax bills.

Tax reliefs, or tax breaks as they are sometimes called, aren’t without controversy, however. There are too many of them, say critics, and they deny the public purse much-needed funds.

Read the full aeticle here.

March 2019 Tax Insider

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Included in this article:

– HMRC error hits early-paying self-assessment taxpayers
– Minimum contributions rise to 3% for employers in April
– Making Tax Digital for VAT: one month to go
– Government launches service to prepare firms for EU exit

Read the full article here.

TQOTW: NEW PAYSLIP LEGISLATION

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My client has asked me about the new legislation regarding payslips that comes into effect in April 2019. Can you shed some light on this?

TQOTW: SELF-ASSESSMENT PENALTIES

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Now that the self-assessment filing date of 31 January has passed once again, I would like to be able to understand and explain to clients the penalty regime that will apply if their returns have not been filed on time.