Member Since: 6th Jul 2005
3rd Dec 2019
Tax Dragon wrote:
Your legislation is not out of date, but you are not reading it properly. You quote the condition in s55C(2). You first need to read when that condition is relevant – for which refer to s55C(1)(d), quoted by jholm above.
That's really interesting. So the condition to have income under PA only applies if you are non-resident.
So H&W directors/shareholders with minimal salary and BR dividends can save £150ish of tax.
It's quite amazing how much guidance out there is wrong.
27th Nov 2019
Unless I'm reading out of date legislation, s55C(2) ITA 2007 says:
"The condition is that the individual's hypothetical net income for the tax year concerned is less than the amount of the personal allowance to which the individual is entitled for that tax year under section 35"
....which would imply that you can't transfer.
19th Nov 2019
Check the dates on the interest summary - they may be using a 12 month period different to the tax year
Definitely 6.4.18 to 5.4.19
13th Jun 2019
Not Anonymous wrote:
How about SAM110220
BINGO! Yes, that's the one.
Call subsequently put into HMRC who will refer on to review.
Thanks for your help.
16th Apr 2019
The second payment on account would have been due 31 July 2018. However I thought there was only interest on payments on account, not penalties.
Have you called the SA helpline to understand how these arose?
SAM61250 states that:
Late payment penalties are imposed when tax and NIC liabilities (referred to throughout as tax) are paid late. These penalties are applied to balancing payments, determinations, amendments and revenue assessments but not interest, late filing penalties or payments on account. The balancing payment liable to late payment penalty will include any part of a payment on account outstanding at the balancing payment due date.
It is that last sentence which is important here - so an unpaid POA will be caught by a penalty.
But it has been coded out. Balancing Payments which are coded are not subject to a penalty - so why should a POA?
8th Nov 2018
Sorry, I didn't make that clear.
He has none - so reducing to PA is obviously better then zero.
It's the principle of creating a smaller profit, rather than a loss, that I am more concerned with, in light of Portia's comment.
8th Nov 2018
In the case of 2012/13 then, do you think it would be possible to merely claim enough allowances (AIA) to reduce the profit to zero, then carry the balance of expenditure forward and claim WDA in the 2013/14 year (under the same principle)?
Any WDV still left over in 2014/15 would then not be allowable as it is SA and thus "out of time"?
26th Oct 2018
As others have mentioned, there is no balancing allowance - not all the time the business continues.
Why was AIA not claimed on purchase? OK you would have subsequently got a balancing charge - but it at least you wouldn't have ended up with a pool balance to carry forward ad infinitum.
10th Oct 2018
Swedish Chef wrote: ..would not be allowable (where it previously would have under BIM45700). Is my understanding correct?
BIM45700 still exists:-
If you must rely on HMRC rather than the law why are you allowing the dumbed down guidance to carry more weight than the BIM?
In my opinion the guidance does not restrict the relief anyway.
Fair point. But I thought that is why the ICAEW were seeking clarification -as two pieces of guidance say the opposite thing.
Anyhow, looking at the law (s34 ITTOIA 2005), I assume we are arguing that the expense IS incurred W&E for the rental business as it is interest on a loan on a let property, as opposed to not being W&E because it is interest on a loan which has been taken out for private purposes. Is that right?
10th Oct 2018
Portia Nina Levin wrote:
It isn't the purpose of the loan that matters, it is the purpose of the interest expense, which, it seems to me, is wholly and exclusively a business one.
Which was my exact understanding.
However, moving this forward, if that mortgage was subsequently re-financed and increased, with the additional amount being used for personal purposes, the change in guidance referred to in the first respondent's post would now mean that the additional borrowing would not be allowable (where it previously would have under BIM45700). Is my understanding correct?
I thought the ICAEW were seeking clarification on the remortgage point given that the guidance was (somewhat naughtily) changed during an enquiry - did we ever get conclusion on this?