One of the founding partners of The Professional Training Partnership, Tim is also a director of PTP, PTP Interactive and Absolute Accounting Software and is chairman of The Tax Club. He is the author of three chapters in Tolley’s Tax Planning and presenter of TAXtv.
Absolute Accounting Software has a range of planning software apps to allow advisers to check the accuracy of tax computations and the most efficient decisions for their clients. Full details can be found at www.absof.co.uk.
I think Ruddles is right. My analysis assumed we were talking about a reduction in share capital (under CA 2006 s644) rather than a sale of the shares back to the company. A good example of the old adage "Read the question"! If this were structured as a redution in capital there should be no immediate tax charge if executed properly.
My bad - and thanks to Hugo and Paul for the understanding comments. Yes: I should have said that suspension of the three days waiting period ends on 17 March.
This case is the first I have come across where HMRC are arguing that a partnership (rather than a limited company) was an intermediary under the IR35 legislation. It demonstrates how a sole trader who joins a partnership (here the sole trader admits his wife as partner) brings themselves within the scope of IR35. The IR35 legislation has always included partnerships as intermediaries but some contractors may have mistakenly thought that if they didn't operate through a limited company they were outwith the scope of IR35.
Leaving aside the topslicing issue, I wonder if HMRC have any authority to collect the extra £1,100. If a 2017-18 tax return was filed on say 6 January 2019 then HMRC had until 5 October 2019 (nine months from the filing date) to issue a corrected assessment. If the corrected assessment was issued on 28 October 2019 it was not valid and the extra tax is not payable. HMRC would have to open an enquiry within 12 months of the filing date (deadline 5 January 2020) or make a discovery assessment.
The more substantive topslicing issue is due to be heard by the Upper Tribunal on 31 March 2020.
Maybe I was trying to be too clever with my Yes, No, Yes response. More fully:
"Can I ask a question about the change to the PRR rule? Yes
Does the date of occupation of the property (being after the date of transfer) also need to be before 6 April 2020? No
Or is that irrelevant, the most important point being to make the transfer before 6 April 2020? Yes
So to clarify:
No - occupation of the property is not required before 6 April 2020; and
Yes - the most important thing is to make the transfer before 6 April 2020.
The draft Finance Bill 2019-20 clause applies the change to spousal transfers (rather than property disposals) made on or after 6 April 2020. So the answers to your three questions are yes, no and yes.
My answers
I think Ruddles is right. My analysis assumed we were talking about a reduction in share capital (under CA 2006 s644) rather than a sale of the shares back to the company. A good example of the old adage "Read the question"! If this were structured as a redution in capital there should be no immediate tax charge if executed properly.
My bad - and thanks to Hugo and Paul for the understanding comments. Yes: I should have said that suspension of the three days waiting period ends on 17 March.
The advice at para 2.6.5 of the guidance is interesting ...
Under the cash basis the landlord can simply expense the cash cost of the computer. See https://www.gov.uk/hmrc-internal-manuals/property-income-manual/pim1095.
Not for dwellings.
This case is the first I have come across where HMRC are arguing that a partnership (rather than a limited company) was an intermediary under the IR35 legislation. It demonstrates how a sole trader who joins a partnership (here the sole trader admits his wife as partner) brings themselves within the scope of IR35. The IR35 legislation has always included partnerships as intermediaries but some contractors may have mistakenly thought that if they didn't operate through a limited company they were outwith the scope of IR35.
Leaving aside the topslicing issue, I wonder if HMRC have any authority to collect the extra £1,100. If a 2017-18 tax return was filed on say 6 January 2019 then HMRC had until 5 October 2019 (nine months from the filing date) to issue a corrected assessment. If the corrected assessment was issued on 28 October 2019 it was not valid and the extra tax is not payable. HMRC would have to open an enquiry within 12 months of the filing date (deadline 5 January 2020) or make a discovery assessment.
The more substantive topslicing issue is due to be heard by the Upper Tribunal on 31 March 2020.
Maybe I was trying to be too clever with my Yes, No, Yes response. More fully:
"Can I ask a question about the change to the PRR rule? Yes
Does the date of occupation of the property (being after the date of transfer) also need to be before 6 April 2020? No
Or is that irrelevant, the most important point being to make the transfer before 6 April 2020? Yes
So to clarify:
No - occupation of the property is not required before 6 April 2020; and
Yes - the most important thing is to make the transfer before 6 April 2020.
The draft Finance Bill 2019-20 clause applies the change to spousal transfers (rather than property disposals) made on or after 6 April 2020. So the answers to your three questions are yes, no and yes.
Lol! I meant "after". But I got the Yes, No, Yes right!