Demergers are popular from a tax perspective as, broadly speaking, provided they are correctly structured they can allow for the separation of trades / businesses (including investment businesses) with no or minimal tax leakage. This can allow one trade to be sold, attract investment or be ring-fenced separately from another trade or business / asset. In the current business and economic climate,...
Read moreHMRC have released their latest Employment Related Securities bulletin confirming the treatment of certain tax advantaged share schemes where participating employees may have been furloughed or otherwise financially impacted by Covid-19. In it they have confirmed that options granted under Company Share Option Plans (CSOPs) to employees and full-time directors who have been furloughed because of...
Read moreSEIS/EIS remains a very powerful tool for attracting investors and de-risking their investment to an extent. SEIS offers a 50% relief and EIS offers a 30% relief - this means that an amount equal to 50%/30% (as applicable) of the amount invested can be set against the investor’s income tax bill. If the investment is not successful and losses are made, the losses (less any relief claimed) can be...
Read moreEMI options are a great way of delivering shares to employees. They are tax efficient, straightforward to implement and flexible. It is possible to agree the share value with HMRC before the options are granted (which is very attractive as that means there is certainty of tax treatment) and they can be put in place relatively cheaply. In most cases if a company qualifies to grant EMI options,...
Read moreAs the country faces economic uncertainty, which may mean some businesses look to restructure or refinance their debts, we thought it would be helpful to outline the rules around when individuals and trustees can get tax relief for debts that may be, or become, irrecoverable. We will not touch on lending between companies in this Bite, which was the subject of a recent Tax Bite and is available...
Read moreWith all businesses more focussed at this time on cash reserves and potentially faced with having to make difficult decisions about their people, we are finding that companies are thinking about EMI options and the ability to reward employees with equity based awards. They are being used as an alternate remuneration strategy for example to compensate staff for temporarily taking a lower salary or...
Read moreHMRC have introduced new temporary, emergency processes around stamping documents as a result of coronavirus measures, which new processes will remain in force until these measures end – although it is not clear at this stage what is meant by that. What it does mean is that with immediate effect HMRC will not be physically stamping documents and the new processes, summarised below, should be used...
Read moreCompanies with valuable property (or other) assets sat in their trading companies should consider reorganising their structure to try to ring-fence these valuable assets from trading risk. If there is already a group structure, then it should be relatively straightforward to transfer assets to achieve this commercial aim. There are some tax points to consider before doing so, not least VAT and...
Read moreIt was announced in the Budget on 11 March 2020 that the ER lifetime limit is reduced from £10m to £1m for sales on or after that date. The draft legislation published on Budget day unfortunately goes considerably further, as it also contains two measures described as “anti-forestalling” rules designed to capture ER planning implemented pre-Budget, but which in our view had the potential to...
Read moreThe lifetime limit for capital gains that can be subject to entrepreneurs’ relief (to be re-named business asset disposal relief for tax year 2020/21 onwards) has been reduced from £10m to £1m. A successful ER claim reduces the rate of capital tax on the sale of an asset by 10%, so this curtailment is very significant. This Tax Bite provides some basic tips on maximising ER on share sales. As a...
Read moreThis is a summary of the most important property tax changes that came into effect in April, together with a reminder of some other key recent changes. Clearly the Covid-19 crisis is severely impacting the property market, as it is almost all sectors and areas of the economy, and we will provide other bulletins which are focused on Covid-19 and related challenges and opportunities from a tax...
Read moreOne of the inevitable consequences of the economic downturn resulting from the Covid-19 crisis is that many companies will need to take steps to restructure debts. This Tax Bite very briefly highlights some of the most important tax points to be aware of on common debt restructuring actions, and some consequences companies may not have thought of. • General rule – debt waivers are taxable – where...
Read moreParisi Tax is a specialist tax law firm. Our clients benefit from having on-demand access to a wealth of tax knowledge and deal expertise.
Services