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...

What is a share for share exchange? A share for share exchange takes place when one company issues shares to a person in exchange for shares in a different company. If the specific conditions in the relevant legislation (TCGA 1992) are met, then the share for share rules will apply. However, this will need careful analysis. What is the effect of the share for share rules? The effect of the share for share rules is that the person’s old shares are effectively swapped for the new shares issued to them. There is no disposal by the person for Capital Gains Tax (“CGT”) purposes and therefore no CGT payable. The new shares effectively ‘stand in the shoes’ of the old shares – this means that they have the same base ...

Plug-in electric vehicles offer a wider variety of ‘refuelling’ options for drivers, including charging at home, at work and at public charging stations. When reclaiming the cost of charging for business travel, there are some unique tax considerations for fully electric cars. The Advisory Electric Rate (AER) Electricity for a company car is not considered ‘fuel’ and therefore, no fuel benefit charge will arise. HMRC publish advisory rates for businesses to use for the re-imbursement of mileage in company cars. These rates will be used where a company is reimbursing its employees for business travel in company cars but also when employees are required to repay the cost of fuel for private travel (more discussed below). Furt...

In a recent appeal to the First Tier Tribunal (“FTT”) by well-known TV presenter Adrian Chiles, it was ruled that the Intermediaries Legislation (known as IR35) did not apply. This was a significant success for the taxpayer – indeed, just over £1.7m of PAYE and NICs were at stake. This blog will consider the deciding factors in this case and the relevance of these for future cases. The decision of the case can be read here. What is the Intermediaries Legislation (IR35)? In summary, the Intermediaries Legislation (found in ITEPA 2003 and known as “IR35”) is applicable where an individual provides services through a Personal Service Company (“PSC”) and thereby avoids PAYE and National Insurance. It is necessary to con...

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, ...

Non-UK tax residents are generally not liable to capital gains tax (CGT) in the UK, on the disposal of assets. However, there are exceptions to this, in particular capital gains on UK based land/property and the rules applying to temporary non residents. This is especially relevant for taxpayers who leave the UK and become non-UK tax resident, as they may not be aware of their UK tax and compliance obligations. Non-UK Residents and Capital Gains on UK Property As noted above, individuals are generally not liable to CGT on capital gains when they are non-UK tax resident. However, where the gain arises on land/property based in the UK, then the gain is subject to UK tax. The rules also extend to assets that derive at least 75% of ...

If you sell a property which is your only or main residence or has been at some point during your period of ownership, Private Residence Relief (“PRR”) will be available. This means that if a capital gain arises on the sale, PRR will exempt either all or part of the gain from Capital Gains Tax (“CGT”). If you have more than one private residence, you can make an election to nominate one of your residences as your PRR. Please see our previous blogs for further details. However, one point that taxpayers may not be aware of is that a rented property can class as a residence for the purposes of PRR. This is because if you have an ‘interest’ in a property, which includes any legal or equitable interest from being the owner of t...

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...