Domicile has historical routes for being known as one’s ‘home’. It is very important to understand your domicile status as this can have a number of tax consequences, especially in relation to UK Inheritance Tax (“IHT”). This article sets out where an individual can be deemed to be domiciled in the UK for IHT purposes and what this means for taxpayers. Please note that this article specifically relates to IHT and does not discuss Income Tax or Capital Gains Tax. What is Domicile? Domicile is a common law concept and can broadly be described as an individual’s permanent home and where they plan to live permanently or indefinitely. For further information on what domicile is and the different types of domicile, please tak...

John Hargreaves’ (founder of retailer Matalan) Upper Tribunal (“UT”) appeal concerned HMRC’s entitlement to make a discovery assessment in respect of his 2000/01 tax year of assessment. For more information on discovery assessments, see our previous article. What were the facts of this case? From 01 March 2000, Mr Hargreaves was the executive chairman of retailer Matalan. He started to spend time in Monaco, and the details of the UT Judgment state that part of his objective for moving to Monaco was to ensure that he was no longer UK tax resident, so that he could dispose of his shares in Matalan without being subject to UK Capital Gains Tax. On 16 May 2000, Mr Hargreaves disposed of his shares in Matalan for £231 million, ...

HMRC have seemed to send out a warning to anyone that is opting to use crypto assets to avoid their tax obligations. This article seeks to discuss the concept of Non-Fungible Tokens, its influence of digital ownership and HMRC’s recent seizure. What are Non-Fungible Tokens? A Non-Fungible Token, commonly referred to as an NFT, are digital tokens stored on the blockchain that can be bought and sold using cryptocurrency and represent certificates of ownership for both digital and potentially physical assets. NFTs differ from cryptocurrencies, where they are digital ‘uniques’ which cannot be exchanged like coins and other cryptocurrencies. NFTs first emerged in 2014 and each token is evidence of ownership of a unique and non-int...

The word ‘Crypto’ by its definition has the meaning ‘hidden’ or ‘secret’. In a new ‘nudge’ campaign, HMRC appears to be alerting taxpayers that there could be undeclared tax on the disposal of their cryptoassets. At the end of October 2021, HMRC’s Wealth External Forum issued a briefing that they will be sending ‘nudge’ letters from November 2021, to taxpayers who they believe have held cryptoassets, and to highlight the potential tax implications. Examples of the letters sent can be found here. Over the last couple of years, HMRC have conducted a number of ‘nudge’ letter campaigns including targeting taxpayers to review their non-domicile tax position and income from rental properties. Why have HMRC sent ...

The 31 January 2022 deadline for taxpayers to file their 2020/21 tax returns is quickly approaching. In light of this, HMRC announced on 6 January 2022 that late filing and late payment penalties will be waived for one month for Self Assessment taxpayers who are yet to submit their 2020/21 tax returns. The announcement was made as a result of the extra pressures taxpayers and their agents are facing this year with COVID-19. HMRC have acknowledged that COVID-19 could be affecting some taxpayers’ ability to file their tax returns by the 31 January deadline. Although, official HMRC department figures at the date of the announcement show that out of the 12.2 million taxpayers who are required to submit a tax return, nearly 6.5 million t...

In the recent case of Crippin v HMRC [2021], the taxpayer (Mr Crippin) was successful in his First Tier Tribunal appeal in relation to claiming Private Residence Relief “PRR” on an annex. This blog will discuss this case and its relevance for those who may be disposing of similar assets. Background In 2006, Mr Crippin purchased a house named ‘Loaningdale’ and an adjacent annex named ‘Bothy’ for him and his family. Mr Crippin and his partner were not married. In 2009, Mr Crippin submitted a planning application to construct an ancillary accommodation above Bothy (and the double garage attached to Bothy). This was named ‘Benko,’ and this eventually became a three-bedroom flat with a kitchen/living area and bathroo...

Dave Clark (“Clark”), former sports presenter for Sky Sports, had his IR35 appeal dismissed at the First-Tier Tribunal (“FTT”) resulting in a tax liability of over £281,000. The case turned on whether his working relationship with Sky fell within the IR35 intermediaries legislation, otherwise known as ‘off-payroll working’. The judgment can be found here. What is the IR35 intermediaries legislation? The Government introduced this legislation in 2000 to prevent tax avoidance from workers who offered their services through a limited company or a partnership in order to reduce or avoid PAYE and National Insurance Contributions (“NIC’s”). One of the main aims of determination is to ask: "if the intermediary did not ...

The autumn budget was presented by the Chancellor of the Exchequer on Wednesday 27 October 2021, where for the most part few changes to the tax rules in the UK were announced. However, it was acknowledged in the budget that changes would be made to the Capital Gains Tax (CGT) Payment for Property Disposals (PPD) service rules. For further details on what the CGT PPD service rules are and whether they may apply to you, please consult our previous blog which provides details of this service. PPD Service Deadlines Previously, the government introduced new reporting requirements for UK residents disposing of residential property on or after 6 April 2020, where it was established that the deadline for taxpayers to report the disposa...

When it comes to the UK tax system, HMRC impose various penalties to ensure compliance and to encourage taxpayers to file their tax return by the 31 January deadline following the end of the tax year (or 31 October for paper returns). The penalties for missing the tax return filing deadline can be punitive, with HMRC also issuing the following penalties in relation to tax returns: For the late payment of tax; Failure to notify penalty, where a new source of taxable income or capital gains are received; Errors or inaccuracies on the return; Failing to keep sufficient records. Penalties for Late Filing of Tax Returns HMRC issue standard penalties for failing to submit your tax return on time, whereby these penalties ap...

The UK Supreme Court commented during the recent case of HMRC v Tooth [2021 UKSC 17] that ‘staleness’ is not a concept that can be used against discovery assessments, meaning that a discovery will not lose its quality over time. ‘Staleness’ has previously been argued by taxpayers to state that a discovery needs to be new and the discovery assessment needs to be issued within a certain period of time otherwise the discovery and the discovery assessment will not be valid. The concept of ‘staleness’ has been subject to numerous cases of litigation between HMRC and taxpayers since 2008 and this recent ruling has provided clarity on this matter. What is a Discovery Assessment? The rules for discovery assessments are largely ...