Retired. but still a trustee of a charity, and work on a relative's private company
Sorry, I seemed to have duplicated part of my reply to you.
But I have found this, from CIOT:
Having retired some time ago, my own comment might not carry much weight. But I shall watch their site with interest.
I am glad you agree that the withdrawal of lettings relief is unfair.
On the issue of the relief is retrospective , it seems some people think contractor loan schemes are retrospective, or at lease retroactive, including the CIOT. https://www.tax.org.uk/media-centre/press-releases/press-release-treasur...
Thank you for your interest. I am glad we agree that the withdrawal of the relief is unfair.
You have compared my understanding of whether this is retrospective or not is like the contractor loan scheme. A lot of people seem to think the latter actually is retrospective, or at least ,retroactive.:
When capital gains tax was introduced in 1965, it was designed to be effective from that date. There was either a time apportionment or you could elect to have the gain base on the increase from budget day value. This would be a preferrable approach.
I shall now search their website and see if they say anything about this development.
I note the consultation is still going on.
Take a taxpayer who moved into house in 1989, and it became her PPR. She moved house in 2001, and that became her PPR. She let the old house residentially. Under the old rules, she would have 12 years lettings relief, and 18 months relief at the end of ownership. from this, it would appear she has lost her lettings relief., and cost her £7200, assuming her cgt at 18%. This is unfair.
It would be fairer to apply the new rules from budget day, to preserve lettings relief up till then. This could be done on a time apportionment basis, or a rebasing to November 2018 on residential properties. Otherwise, we have retrospective taxation. We are not talking about arcane schemes of tax avoidance, in fact it is not avoidance at all, she is just an accidental landlady. There must be thousands like her.
Would it be legitimate avoidance to settle the property on her and her husband as joint tenants, with her to retain a life interest?
Unless of course there is a change of government and the rate of cgt is 100%
So how will this affect a householder who left his PPR in 2006 after 14 years living in it, lets it for 14 years, and sells it in 2020.
One would like to think the letting gain up to budget day would be allowed to stand, but the point mustn't be overlooked.
One of your former colleagues (50+ years ago!) said it was assessed as furnished lettings.
I would have thought as general trading the capital allowances claim would have been a bit embarassing.
I wrote: "We have changed our professional accountant following the retirement of our existing accountant in practice. this has involved us in fee protection insurance."
This may have given the impression that our retired advisor didn't use FPI. He did, through FSB. (I didn't use FSB for any other purpose, but for a very small practice it was the cheapest way of getting FPI).
If, unlike their client, your predecessors had made full disclosure, presumably HMRC could not have reopened years once the enquiry window had closed.
You were right to make your client persist with the case. I had a client, a professor, whose substantial working library of books , some of them antique, was regarded as unnecessary by HMRC, and capital allowances challenged, when I brought it into the capital allowances claim, having been missed by my predecessor. He was reluctant to resist, preferring to spend his time more usefully, but I pointed out to him that HMRC might be testing the water, and his colleagues in that department might find their libraries challenged. (Professors one year, pole dancers the next!)We were 85% successful in our claim, following a requirement for HMRC for an analysis of the use to which the books were put, some were not sufficently relevant to his field. Our success might have been because I was able to produce a copy of a letter from another inspector to a professor in another university (name and references blacked out), refusing revenue treatment of his books and actually requiring me to provide a capital allowances computation, obviously indicating that other Districts weren't contending that a University professor didn't need reference books.
When I brought in the library, I provided a full list of titles and estimate of value, and how it had been arrived at. Consequently, when HMRC offered agreement without penalties and earlier years left as they were, I think this was because the window had closed anyway.
Thank you, Jack the Lad.
I have been retired for about 8 years, but I still have an interest in the case, as I am a trustee of one charity and internal accountant to a family member's private company, so I still play with spreadsheets and ETB.
We have changed our professional accountant following the retirement of our existing accountant in practice. this has involved us in fee protection insurance. Do you regard this as essential, and were you happy with the results? (Obviously I'm not asking you for figures).
(Incidentally, I'm surprised the Learned Judge didn't go down to Stringfellows to see for himself, and nor did HMRC. They might have preferred it to clambering over building sites looking at what we successfully claimed was an industrial building.