For the young, talk of pensions may seem a low priority given the competing financial demands of housing, student loans and living costs. Retirement planning can feel distant and complicated, and tax changes, rumoured and real, such as potential inheritance tax liabilities and possible reductions in tax-free lump sums, may cast further doubt on future
Lifetime ISA or pensions? Read More »
Tax return errors by individuals are not uncommon but unfortunately can have serious consequences. For example, HM Revenue and Customs (HMRC) can impose penalties for inaccuracies in tax returns. The level of penalty broadly depends on whether the inaccuracy was ‘careless’ or ‘deliberate but not concealed’ or ‘deliberate and concealed’, subject to reductions based on
A step too far by HMRC? Read More »
Given the increase in school fees over the last 20-30 years, and more particularly since January 2025 with the application of VAT to such fees, there has never been more incentive to pay those fees in a more tax-efficient manner. Trusting in trusts By using a trust, whose beneficiaries are the children attending the school,
Trusts and school fees Read More »
HMRC has stated that expenditure on business entertainment cannot be claimed as a deduction against profits (and is therefore also non-VAT-recoverable), even if a genuine business expense. However, that is not entirely correct – there are exceptions. What is ‘entertaining’? The rules are designed to prevent tax relief from being used to subsidise personal or
Business entertainment: Will HMRC have the last laugh? Read More »
Putting a property in someone else’s name can be sensible planning. However, it is not always straightforward, and documentation is key. Consider the following scenario. A friend’s parents devised a genius plan: uncle needs to clear his mortgage of £200,000. Dad will buy uncle’s flat in Manchester for £200,000 to pay the bank, then let
Property in Someone Else’s Name Tax Implications Read More »
In this article, PETs refer to potentially exempt transfers for inheritance tax (IHT) purposes; GWRs refer to gifts with reservation of benefit; and POAT to pre-owned assets ta Potentially exempt transfers PETs are typically lifetime transfers made by individuals to other individuals. An attraction of PETs is that no immediate IHT charge arises at the
Giving it all away: PETs, GWRs, and POAT Read More »
When a business incurs input tax on its purchases, it’s entitled to reclaim it from HMRC, provided the business has the correct evidence to make the claim. But sometimes, through an oversight, it isn’t claimed on time; so, what are the rules for claiming back input tax late? Normally, the input tax on a purchase
Making a late claim for input tax Read More »
The difficulties of affording a house and the potential for help from the ‘bank of mum and dad’ are often discussed. Parents may be willing to assist and this will commonly be by transferring money to children and because there is no ‘gift tax’ on such payments, it might be thought that this is the
The bank of mum and dad Read More »
Business property relief (BPR) is a valuable inheritance tax (IHT) relief, despite the restriction in relief at the 100% rate to the first £2.5m of an individual’s relevant business property from 6 April 2026. Above that threshold, the BPR rate reduces to 50%. However, any unused 100% relief allowance can be transferred to a spouse
The devil in the detail Read More »
An ‘excepted’ asset for inheritance tax (IHT) business property relief (BPR) purposes is defined within IHTA 1984, s 112 as follows: ‘(2) An asset is an excepted asset in relation to any relevant business property if it was neither— (a) used wholly or mainly for the purposes of the business concerned throughout the whole or
IHT: BPR and ‘excepted assets’ Read More »
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