Tax Insider Newsletter Bundle

‘Settlements’ traps for family companies

An individual may form a limited company to carry on their business – or indeed to hold assets (e.g., a property portfolio). The shares in the company may be held by the individual or individuals who are actively involved in running the business, whether trading or investing.  

Richard Curtis points out that family companies have many advantages but warns that unexpected liabilities can arise for the unwary. 

One of the main attractions of forming a limited company is that it has limited liability. Under limited liability, a director or investor in a company is only liable for the money that was invested in the event that the company goes bankrupt. 

Andrew Needham looks at the circumstances where a company director can be held personally responsible for the payment of a penalty imposed on the company by the issue of a personal liability notice.

Capital gains: Reporting without completing tax returns

HMRC’s real-time capital gains tax reporting service launched in April 2023 and is aimed at individuals not currently in the self-assessment system. 

Jenni Davie looks at the reporting of capital gains outside the self-assessment regime. 

Service with a smile: the new 'tipping' rules

On 1 October 2024, the Employment (Allocation of Tips) Act 2023 came into force, aiming to ensure a fairer distribution of the payments customers leave as gratuities to staff. The tax treatment of tips and service charges depends on how staff are paid – does the new legislation change the tax position?

Jennifer Adams considers whether the Employment (Allocation of Tips) Act 2023 will have any tax consequences.

Comings and goings: ‘Non-dom’ changes

For over a hundred years, the remittance basis has been in place for those not domiciled in the UK (non-doms). 
However, in April 2024, it was announced that the foundation for the remittance basis will change from domicile to physical residence in the UK from April 2025. Also, changes were announced with respect to exposure to inheritance tax (IHT) from the ‘deemed domicile’ rules. 

Chris Thorpe considers recent announcements concerning ‘non-dom’ status.

Inheritance tax treatment of joint bank accounts.

Joint bank and building society accounts (e.g., between spouses or civil partners, or family members) can be tricky for inheritance tax (IHT) purposes when one of the joint account holders dies. The main difficulty is in establishing how much of the balance in the account ‘belonged’ to the deceased immediately before death; was it 50%, 100%, or something else? 

Mark McLaughlin looks at the inheritance tax treatment of joint bank accounts.

Christmas: Bringing forward paydays

When reporting information via the full payment submission (FPS), there is the ‘per pay-period’ obligation to submit this on or before the date of payment (SI 2003/2682, reg 67B). 

Ian Holloway discusses the ‘on or before’ real time information (RTI) implications to be aware of when bringing paydays forward at Christmas.

Q&As with Arthur Weller

Dividends or bonuses? We can work it out!

Consider the following scenario:

'On a wintry sunny morning, Alan was reviewing his company’s January 2024 management accounts. Alan was the sole director and 100% shareholder of Llandudno Hotels Ltd, which operated two large hotels in Llandudno. The business was on course to healthy pre-tax profit of around £650,000 for the year ended 31 March 2024. Alan had been planning to pay himself a substantial ‘bonus’ before the year-end'. 

What does Alan do?

Peter Rayney examines an owner-manager’s cash extraction following the numerous tax and National Insurance contributions changes.

Use them or lose them: 2023/24 tax allowances

As the tax year draws to a close, it is prudent to review one’s 2023/24 tax allowances and consider whether there is scope for utilising any unused allowances so they are not lost. 

Sarah Bradford explores options for using 2023/24 tax allowances so they are not wasted.

Record-keeping in a digital age

Lee Sharpe looks at taxpayers’ record-keeping obligations in light of HMRC’s inexorable march to digital everything (almost).

Historically, HMRC has been quite relaxed about whether original records must be maintained or digital facsimiles (scans, etc.). 

Trap for business owners seeking CGT incorporation relief

HM Revenue and Customs (HMRC) recently commenced a ‘One to Many’ campaign, targeting taxpayers who incorporated property businesses in the tax year 2017/18 but reported no capital gains tax (CGT) liability in their tax returns on the basis that ‘incorporation relief’ applied in full. 

Mark McLaughlin highlights a potential trap for business owners seeking capital gains tax incorporation relief.

Q&As with Arthur Weller