C3Insight

Business Succession and Inheritance Tax…

Clients regularly talk to us about their key points of concern when considering what the future will hold for their valuable assets once they have passed away – squandered inheritance or claims on the estate, and Inheritance Tax.  

Following death, legacies can be carved up by squabbling families, spent or claimed against as part of divorce proceedings, turning valuable, profitable and income producing businesses in to no more than a headache for the recipients of a will.  

Inheritance Tax (“IHT”) can worsen that headache significantly; often publicised as the UK’s most hated tax, it broadly operates by taxing the value of a person’s estate which is over and above the nil rate band (currently £325,000). 

While the nil rate band has been frozen since 2009, property (perhaps the most often inherited asset class except from cash) prices have risen significantly, which has resulted in more and more estates and households becoming liable to the tax.  

IHT can be complex and where due consideration and foresight has not been given, dismay and confusion can ensue at what is generally one of the most emotional periods of our lifetimes. 

Proper planning and forethought can moderate the complexities involved with succession and IHT and can help to provide clarity and control to the taxpayer and their loved ones. With proper planning and support It is possible to protect and retain assets intended to be bequeathed for future generations. We have set out an example below of the planning process a family might go through and the benefits that they and their family could enjoy as a result: 

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Employee Benefit Trusts and other ‘disguised remuneration’ schemes – HMRC new terms of settlement issued and embargo lifted

Following on from our four part series discussing the April 2019 loan charge (which you will find here), we are now able to discuss the recently issued settlement terms available to users of Employee Benefit Trusts and other ‘disguised remuneration’ schemes.

As we highlighted in that recent series of blogs, following their success in the Murray Group Holdings (Rangers Football Club) EBT case, HMRC recently enforced an embargo on settlements, bringing all settlements in progress to an immediate halt at the beginning of October. The embargo was, we understand, to allow HMRC to review the settlement terms available to all disguised remuneration cases, to ensure they fell in line with the findings in Murray. Regardless of how progressed they were, no settlements were allowed to complete. Read more

Taxation of Buy-to-Let Properties

In 2015 the UK Government set out its Five Point Plan for housing which was designed to stimulate housing supply and encourage first-time ownership. Support such as this was welcomed by many as the impact of the global financial crisis, and the critical effects this had on the property development sector, continued to be felt by first-time buyers as they battle astronomical rents and house prices worsened by low salaries.

Alongside the introduction of affordable homes, and enhancements to the Help to Buy scheme, the Government has over recent Finance Acts introduced a number of tax changes imposed on buy-to-let investors presumably with the intention of deterring investors from investing further, which the Government believes will free up property for owner-occupiers. Read more

Part 7A Loan Charge – How will April 2019 affect your clients? – Part Four: Early Settlement Continued

Part 4 of 4 – Should early settlement with HMRC now be considered? – continued

In this article, which is the conclusion to this series of short articles on the Part 7A Loan Charge which you can read here, we had hoped to be able to discuss details of the new HMRC settlement terms and to provide some comparison on how these differ from those previously offered before the sudden HMRC embargo.

However, at time of drafting this article, we still await release of the details of the new terms from HMRC which, after 6 weeks from their announcement is disappointing. Whilst due to the uncertainty created by this action, clients who were already in the process of settling, but did not manage to complete before the embargo, are necessarily concerned that they may be disadvantaged. We should perhaps not be surprised by the delays given HMRC believe there are around 80,000 scheme users who they acknowledge may not all be directly affected by Murray and so we assume a process of segregation is in progress. Read more

Part 7A Loan Charge – How will April 2019 affect your clients? – Part Three: Early Settlement

Part 3 of 4 – Should early settlement with HMRC now be considered?

In this week’s article, given the content of the previous two parts of this article which can be read here, and in the light of the decision for HMRC at the Supreme Court against Murray Group Holdings, we look at whether settling with HMRC should now be considered by clients who expect to receive an April 2019 loan charge.

We understand that HMRC are in the process of deciding how to apply the Murray Group Holdings case and we assume we shall find out shortly. However, it seems highly likely that Follower Notices will be issued to participants of most EBT/EFRBS arrangements (irrespective of any factual differences between the arrangements) and, even if there were differences, would anyone be willing, or rich enough, to risk a 50% penalty by challenging them. Read more