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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

Spring Statement 2018 – Key Announcements

The Chancellor reserved the deliverance of any new major tax measures for the Autumn Statement later this year. Instead, he utilised his Spring Statement last week to focus on the status of our economy at present, and to flesh out some previous announcements. Summarising a couple of the key updates below:

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Entrepreneurs Relief (“ER”)

The Chancellor announced that this Government were “the champions of small business and the entrepreneur,” and with that a Consultation has been opened to determine the mechanics of plans to allow shareholders who would otherwise lose ER to retain it when their shareholding in a qualifying trading company falls below 5% as a result of dilution, for example where the company has a funding round and issues shares in return for capital. Read more

Employee Benefit Trusts – Follower Notices

HMRC have recently started the process of issuing Follower Notices to companies that have used Employee Benefit Trusts in the past.  A sample copy of a notice can be found here. This appears to be the general approach now taken by HMRC with planning of this kind.

As might be expected, HMRC have used the Supreme Court’s decision in the Rangers Football Club EBT case as the judicial ruling which gives them the authority to issue FNs. HMRC believes that the tax advantage claimed by companies would be denied if the principles from the Rangers case are applied to companies’ use of the planning. Read more

April 2019 Loan Charge – Transfer of liability to employees

The most recent instalment in the continuing disguised remuneration discussion was published on Friday 1st December, in the form of a technical note discussing how HMRC would seek to transfer the April 2019 tax liability to employees who had received benefits from EBTs and other disguised remuneration schemes where Employers are unable to pay.

The note focuses on a particular three scenarios a liability might be transferred out to the employee/ultimate beneficiary under the scheme; 1. where the employer is/was offshore, 2. where the employer is no longer in existence and 3. where the employer simply cannot pay the PAYE arising from the April 2019 charge. Read more

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