Tax 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 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 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 moreThe Government has announced further details of the Future Fund which opens today. It is disappointing news for companies and investors who were hoping that the matched investment could be through SEIS/EIS share subscriptions. It has been confirmed that the scheme will only apply to match convertible loans made by investors which of course means that SEIS/EIS share subscriptions will not qualify...
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