Client is due to receive a SWAP claim shortly made up of the following:
i) Monthly hedging premiums paid
ii) Additional interest above loan rate
iii) Amounts to buy out
And ‘loss of earnings’ as a result of
i) Normal return on capital employed
ii) Resource used in calculation the claim
iii) Costs
Just having difficulty in find any clarification on HMRC or other sources on what parts are/aren't taxable. Client received tax relief on the cost and buyout so expect the majority to be taxable. Any thoughts or experience in this area?
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IRHP
Although I have enormous amounts of experience with the products (Swaps, Options, Futures etc..) we are still waiting for any HMRC involvement with the tax.
We have split ours up into segments:
We have 'reversed' out the previous taxable position for the product claim. So how did you account for the 'hedging premiums'- presumably the difference between the fixed rate and the floating rate?
Interest- Just treated as bank interest.
Treating the rest like an Insurance claim.
As a further point- have you had any luck claiming your costs?