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 to exempt either all or part of the capital gains that arise on the sale of the property. Please see my previous articles for more details of this relief in general,  and how it can be calculated and claimed. In particular, there are specific rules that married couples and couples who are getting divorced should be aware of and this article will focus on these specific areas. PRR and Married Couples PRR Election Where a married couple are living together, they can only have one qualifying property for PRR purposes between them. If, at the date of marr...

As an employer, there are numerous ways that you can remunerate or reward your employees and encourage their ongoing commitment to the business or company. Such rewards can be monetary, the provision of some form of benefit, or the gift or transfer of an asset. However, care should be taken when considering such "rewards" or "gifts" as in many cases they are likely to be deemed to be earnings and therefore subject to tax and/or National Insurance Contributions (NICs). Recent Case In the recent case of Mullens v HMRC (TC08112),  Mr Mullens (the taxpayer) sought to persuade the First-tier Tribunal (FTT) that huge payments he received from Bernie Ecclestone’s businesses, as well as from Ecclestone’s ex-wife and trusts, were gifts...

The Office of Tax Simplification (OTS) has published its second report on Capital Gains Tax and has provided recommendations to simplify practical, technical, and administrative issues faced by taxpayers and their agents. This is following the circulation of the first report in November 2020 which focussed on policy design and principles. Some of the key recommendations made by the OTS include: An extension of the 'no gain no loss' window on separation. Under the current rules, taxpayers have until the end of the tax year of separation to make all relevant transfers (e.g. properties) on a CGT neutral basis. The OTS suggests that this period should be extended to the later of a) the end of the tax year at least 2 years after the sep...

The housing market is currently booming with the average UK house price increasing by 10.2% for the year to March 2021. One catalyst behind this surge is thought to be the stamp duty holiday due to end on 30 June 2021. However, according to property market analysts, this surge may be short lived as house prices are expected to fall again post June after the stamp duty extension deadline, where the extension to the rate bands are expected to be in place until 1 October 2021. Please check our article on the Spring 2021 Budget for further information regarding this. Amongst those acquiring new properties will be landlords purchasing buy-to-lets. With this in mind, we’ve set out 3 top tips below to help landlords efficiently manage thei...

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 ...

With more and more people currently working from home and being given the option to do so on a permanent basis, the idea of converting your spare room into a dream office to be used solely for work purposes may seem very appealing. However, you should be aware of the impact that this could have on your Capital Gains Tax (“CGT”) liability when you sell your property. This is because Private Residence Relief (“PRR”) is restricted if a room or area of a property is used exclusively for business purposes, i.e. for a trade, business, profession or vocation (with no private use at all). In summary, you will not be required to pay CGT if you sell a property which is your only residence and has been your only home throughout your peri...

If you are an employer and you operate either an Enterprise Management Incentives (EMI) scheme or an Employment Related Securities (ERS) scheme, you will need to file an EMI or ERS return by 6 July after the tax year end. For the tax year ended 5 April 2021, the deadline is 6 July 2021. Furthermore, there may be cases where an ERS return is required but no official scheme is in place, such as where an employee or director has acquired shares in a company by reason of their employment (subject to certain exceptions), or the company has been restructured and employees/directors have received new shares. Enterprise Management Incentives (EMIs) EMI is a form of employee share option scheme that allows selected employees to be rewarded ...

Stamp Duty Land Tax (SDLT) is charged to the buyer on the acquisition of land in England and Northern Ireland. With the rates for SDLT typically being greater for residential land, there is an incentive for property to be deemed non-residential for tax purposes. In the case of Hyman, Pensfold, & Goodfellow v HMRC [2021], the Upper Tribunal upheld the rulings of the First-Tier Tribunal and found that land bought together with a house formed part of the garden and grounds. Therefore, the residential rates of SDLT applied on the full purchase price with no reductions given for the fact that the houses were acquired with a substantial amount of land. Background The Upper Tribunal considered three cases all with similar background f...

We recently wrote an article on the delays to the upgraded Trust Registration Service. HMRC have now announced that the upgraded Trust Registration Service is now expected to be rolled out in Autumn 2021 rather than Summer 2021 (which was announced recently by HMRC), causing further delays in allowing trusts to register on the Trust Registration Service. HMRC have also now confirmed that they will be extending the deadline to register to approximately 12 months from the delivery of the upgraded Trust Registration Service to provide additional time for registration. Related Articles https://www.pd-taxconsultants.co.uk/extension-to-the-uk-trust-registration-service-deadline-delay-to-upgraded-trust-registration-service/

In the 21st century, cryptocurrencies have gained huge traction globally, particularly with the creation of Bitcoin in 2009. Evidence of this significant increase in demand is that there are now more than 4,000 cryptocurrencies to choose from. However, despite this increasing popularity, a significant proportion of the population is still unsure as to what cryptocurrencies actually are, and whether they are worth investing in from a tax perspective. Trading in cryptocurrencies certainly has its success stories with there now being an estimated 100,000 people with $1 million or more invested in bitcoin. However, you should take care when considering these investments as there is a large amount of volatility involved when dealing with t...