Tax and Financial Planning

HM Revenue and Customs (HMRC) have tasked a new team of 200 investigators and specialists, the ‘Affluent Team’, with identifying wealthy tax avoiders. One of the first targets of the team is wealthy individuals who own land and property abroad....

The wave of litigation which has followed the turmoil in the financial markets as a result of the credit crunch has led to many decisions that have resulted in those suing financial institutions being left to lick their wounds (and also facing sizeable legal...

HM Revenue and Customs (HMRC) have had difficulties in the past in checking on property sales to ensure that the ‘principal private residence’ exemption for Capital Gains Tax (CGT) is being used correctly. Notwithstanding the complexity of the...

In order for an asset to be removed from an estate for Inheritance Tax (IHT) purposes, the donor of the asset must retain no benefit from it after the legal title to it passes. Complex ‘reservation of benefit’ legislation exists to ensure that...

People who suffered losses as a result of the collapse of mutual insurer Equitable Life in 2000 will be pleased to know that the compensation payments they receive as a result of the passing of the Equitable Life (Payments) Act 2010 will be tax free. The...

New measures put forward by HM Revenue and Customs (HMRC) to deal with the problem of ‘tax agents who act dishonestly in tax matters’ include proposals that HMRC should ‘name and shame’ advisers who are found to have acted dishonestly...

The Supreme Court recently handed down its judgment in the case of Gaines-Cooper v Revenue and Customs . In what will be a suprising decision to many, the Court has ruled in favour of HM Revenue & Customs (HMRC), who argued that businessman Robert...

Just four months after relaunching Index-linked Savings Certificates, the Government-backed savings institution National Savings & Investments (NS&I) has withdrawn its Savings Certificates from sale. The move was necessary in order to ensure that it...

If you move abroad to work, you pay your tax where you now live and that is the end of the matter. Or is it? Regrettably not. The UK tax system is a ‘world tax’ system, which seeks to tax the worldwide income of its residents. In order to avoid...

Anyone who has substantial assets in the United States, is a US citizen, or expects to inherit assets situated in the USA or which are the property of US citizens, should take note of recent changes to the US Estate Tax. The legislation, in the form of the...

According to a new report from the Institute for Fiscal Studies (IFS) – Tax by Design – the current tax system is "inefficient, overly complex and frequently unfair" . It calls for some radical changes to taxation policy, warning...

If a person's estate does not fully utilise the nil-rate band for Inheritance Tax (IHT) purposes, the unused proportion of the nil-rate band can be used on the death of that person’s spouse or civil partner. This is termed the ‘transferable...

The High Court recently ruled in favour of a pension scheme which decided to stop awarding pension increases which, though discretionary, had in practice been regularly given in the past. The Prudential’s pension trustees had for many years followed...

In the year to December 2010, HM Revenue and Customs (HMRC) raised in the region of £70 million in additional tax as a result of challenging property valuations included in the estates of people who had died. Inheritance Tax (IHT) is payable if the...

Trustees of discretionary trusts who have found that recent tax changes have resulted in an unacceptably high level of taxation (especially as regards trust income from dividends) should give consideration to the possibility of amending the trust to give a...

Clients who have discretionary trusts in place are reminded that the advent of higher rates of tax since April 2010 may warrant a review of the trust structure. Since April 2010, trustees of discretionary trusts have been subject to a 50 per cent tax rate...

Two divorcees who allege that the investment advice they received after their divorces was negligent have commenced proceedings against their financial advisers in a bid to recover their alleged losses. Friends Megan Scotney and Clare Gallacher both...

Changes by HM Revenue and Customs to the disclosure requirements for executors have come into effect. These apply to deaths occurring from 1 March 2011. The first change is that where the deceased gave gifts which exceed the annual ‘Inheritance Tax...

When a trust receives a dividend, the trustees may, in certain circumstances, be able to treat it as a capital receipt rather than a receipt of income. This may have tax benefits for the trust. The treatment is available when the payment of the dividend...

A woman who was suffering from a chronic mental illness and had developed a phobia of opening mail had her bankruptcy annulled by the High Court recently after HM Revenue and Customs (HMRC) were judged to have breached their duties under the Disability...

As of 6 April 2011, the following changes have been made to tax credits: Working Tax Credit (WTC) and Child Tax Credit (CTC) These have been largely uprated in line with inflation. The basic and 30-hour elements of WTC will then be frozen for three...

A tax case recently decided in Scotland has implications for businesses in which a trade that qualifies for Business Property Relief (BPR) for Inheritance Tax (IHT) purposes is carried on alongside one which does not. BPR operates to reduce the value of a...

When seeking to claim the ‘principal private residence’ (PPR) exemption – which exempts from Capital Gains Tax (CGT) gains made on the sale of the PPR of the taxpayer – the criteria for exemption are strictly interpreted by HM Revenue...

The Capital Gains Tax (CGT) reliefs for property owners are surprisingly generous in the UK and provide a variety of tax planning opportunities. The rather beneficial tax regime is probably why many people think that the ability to make an election that a...

A family's eleven-year argument with HM Revenue & Customs (HMRC) over the valuation of a property for IHT purposes has finally been decided by the Tax Tribunal . Mr Price's wife died in 1999, leaving her half share in the matrimonial home to her four...