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 ...

Spring has arrived in the UK, and along with longer sunny evenings and flowers coming into bloom, the Government has released it's Spring Statement 2022. Many of the announcements are in response to rising cost of living/fuel prices/energy bills. We have rounded up the key tax highlights. Income Tax and National Insurance Contributions (“NICs”) From July 2022, for Class 1 and Class 4 NICs, the National Insurance Primary Threshold and Lower Profits Limit will increase from £9,880 to £12,570, aligning them with the personal allowance for income tax. It is estimated that this will save a ‘typical’ employee over £330 in the year from July. From April 2022, self-employed individuals with profits between the Small Profits Th...

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...

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 ...

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...

The division of marital assets is a difficult time for most couples undergoing separation/divorce/dissolution, and little thought may be given to the potential tax implications that can arise. This article seeks to highlight some of these tax issues, and potential planning to help mitigate the potential tax charges and ensure that a larger pool of assets remains for apportionment between the parties. Capital Gains - Tax Year of Separation The transfer of assets between spouses/civil partners who are 'living together' in the tax year, is at no gain/no loss for capital gains tax. Individuals will be treated as living together unless they are separated under a Court Order or formal Deed of Separation, or they are separated in circumstanc...

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...

During the 2020/21 tax year, many individuals and businesses received state grants in order to support them during the COVID-19 pandemic and associated lockdowns. HMRC has issued a reminder that taxpayers (including sole traders and partnerships) must remember to include grants or payments received from coronavirus support schemes in their self-assessment tax returns. This is particularly relevant given the pressing 31 January 2022 deadline. COVID-19 support grants and payments include: Self-Employment Income Support Scheme (SEISS) Coronavirus Job Retention Scheme (CJRS) Other COVID-19 grants and support payments, including self-isolation payments, local authority grants, and Eat Out to Help Out. Failure to include all t...