Tax Bite – Temporary extension to trading loss carry-back rules – implications for deals We noted in a previous Tax Bite that the Spring Budget on 3 March 2021 included proposals for a temporary increase in the carry-back period for trading losses in response to the impact upon businesses of the COVID-19 pandemic. In certain circumstances the carry back period has been extended to the three...
Read moreProperty Tax Bite – Simplifying VAT on Land and Property? There is no doubt that the VAT treatment of land and property is complex. Starting from the most basic statement, set out in the legislation, that interests in land are exempt from VAT, the exceptions to that rule come thick and fast, and that is before considering zero-rating and reduced rating of certain supplies, and exceptions to the...
Read moreTax Bite – Growth Shares Growth shares are a popular form of equity incentive, particularly where enterprise management incentive (EMI) options are unavailable. This might be, for example, because: • The company carries on significant “excluded” or non-trading activities for EMI purposes, so does not meet the trading status requirement; • The incentive is to be in a subsidiary company; • The...
Read moreTreatment of Discretions in relation to EMI Options As you may be aware, HMRC have recently been taking a harder line on the treatment of the exercise of discretions in EMI option documents, with the result that they have been taking the view that where a discretion is exercised, an EMI option should be taxed as an unapproved option to the extent of the exercise of the discretion. It is common...
Read moreProperty Tax Bite – SDLT sub-sale relief In sub-sale transactions, the availability of relief from SDLT for the intermediate purchaser is crucial. In most commercial sub-sales, the facts should support the relief being available, but as ever there are issues and pitfalls to watch out for. In this Tax Bite we very briefly summarise the key requirements for a “normal” sub-sale where A enters into a...
Read moreTax Bite – Stamp Duty on inserting a new holding company This Tax Bite follows on from our Bite of 24 June, covering topical tax issues on demergers. As we explained in that Bite, there is a stamp duty relief, known as section 77 relief, which can apply where a new holding company is placed on top of an existing company / group, which is typically the first step in a demerger or other...
Read moreTax Bite – Spring 2021 Budget The Budget delivered yesterday did not produce any of the immediate tax shocks that had been feared in light of the effect of the Covid-19 pandemic on the country’s finances. In particular, no immediate increases in tax rates were announced, and business asset disposal relief (previously entrepreneurs’ relief), whilst having been severely curtailed in the 2020...
Read moreVAT - Property TOGCs – Tips, reminders, pitfalls Here’s our ten starters for ten on property TOGCs: 1. Does the Buyer need to opt to tax? It is often assumed that the Buyer always has to opt for the transfer to be a TOGC, but that’s not correct. The Buyer only has to opt if the sale would otherwise be VATable, e.g. if the Seller has opted or the sale is of a “new” commercial freehold, so...
Read moreIn response to the COVID-19 pandemic, HMRC began a paperless process for stamping stock transfer forms and applications for stamp duty reliefs on 27 March 2020. It was first announced as a temporary measure, but has since been confirmed to be permanent, with physical stamping now a thing of the past. Most corporate lawyers and others involved in dealing with the administrative side of stamping...
Read moreThere was no Autumn Budget this year so it is now likely that any major tax changes will not be announced until 2021. This seems like welcome news for those rushing to get deals done ahead of the Budget in case of increases to the rates of CGT. However we would sound a note of caution in that the Chancellor’s CGT review is ongoing and is covering many areas including:- • chargeable gains on...
Read moreHMRC have recently published new guidance (available here) on the VAT and SDLT implications of certain lease variations. In spite of HMRC’s statement that there is no change in policy, the VAT guidance represents a move away from what many advisers might previously have considered the position to be on certain lease amendments, where each party “gives something” to the other. The new guidance has...
Read moreAs has been widely publicised, the Chancellor announced a temporary reduction in the rates of residential SDLT** as part of the government’s “mini-Budget”. The nil rate band for all residential property will be increased to £500,000 (from £125,000) effective immediately and until 31 March 2021, in the hopes of both supporting the housing market as it recovers from its hibernation during the...
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