Tax tips newsletter for professionals

A tax charge arises under the company car rules where a car is made available to an employee or a member of their family or household (without a transfer of ownership) by reason of the employee’s employment and is available for the private use of the employee or the member of their family or household. 

Sarah Bradford looks at how cars provided under an employee car ownership plan are currently taxed and outlines plans to bring them within the scope of company car tax rules.

Inheritance tax (IHT) is typically thought of as the tax applicable to individuals and trustees. Whilst, of course, this is correct, the tax’s tentacles may extend to certain categories of companies with respect to gifts made by them or to them. 
It is therefore not unusual for the impact of IHT to be overlooked where transactions involving companies are involved.

Malcolm Finney takes a look at the inheritance tax impact of gifts to and by companies.

We are used to the devolution of local taxation in the UK. For example:

•    council tax and business rates are devolved to Scotland; 
•    similarly, council tax and business rates are devolved to Wales; and
•    domestic rates (as council tax does not exist) and business rates are devolved to Northern Ireland.

Ian Holloway highlights that whilst we appreciate the role of HMRC, it is not the only tax collection body in the UK and we must respect those in the devolved nations.

The sale and rental of property is normally exempt from VAT (under VATA 1994, Sch 9, Gp 1). There are some exceptions to this; these are the sale of new residential property, which is zero-rated and the freehold sale of new (i.e., less than three years old) commercial property, which is standard-rated. 

Andrew Needham looks at the VAT liability of land and property transactions, asks why a business would decide to opt to tax, and considers what the benefits are. 

Mark McLaughlin reviews two recent important tax cases:

Relief for gifts of agricultural land was introduced in 1975 and expanded in 1978 to include other business assets. In 1980, the relief was extended by Sir Geoffrey Howe to cover all gifts (see below). Holdover relief was available on a gift of non-business assets to an individual where the gift was made at any time after 5 April 1980 and before 14 March 1989. On 26 March 1980, Sir Geoffrey Howe's budget statement said: 

“Finally, I propose to remove the present double charge on gifts, which arises from the overlap between capital transfer tax and capital gains tax, by providing rollover relief for the latter. This has been a particular source of grievance and one on which representations have been received from a large number of people.”

Jon Golding looks at the claims for CGT holdover relief but highlights the latent drawbacks of such claims.

An understanding of double tax treaties (DTTs) is essential for advising any taxpayers with international tax affairs. 

DTTs allocate taxing rights between the two contracting states. However, a DTT requires the taxpayer to be a resident of one, and only one, of the contracting states. This is frequently not the case. Internationally mobile clients can easily acquire a tax residence in multiple countries. This conflict is resolved by a series of tiebreakers to determine which state the taxpayer is resident in. 

David Tipping reviews the operation of the tiebreakers in Article 4(2) of the OECD Model Double Tax Treaty and replicated in most of the UK’s double tax treaties, and examines how each of the tiebreakers works to resolve conflicts arising out of a taxpayer’s dual residence for the purposes of the treaty.