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View the related Tax Guidance about Multiple dwellings relief

Weekly tax highlights ― 15 April 2024

Weekly tax highlights ― 15 April 2024Direct taxesPAYE and NICs guides updatedHMRC has updated the 2024–25 version of its CWG2 employer guide to PAYE and NICs to note the following:•tax-free lump sums over £30,000 paid to employees who cannot work due to disability, injury or ill health no longer need to be reported to HMRC (also reflected in the 2023–24 edition)•the new rules around delayed reporting of salary advances•NICs rates from 6 April 2024HMRC has also published the 2024–25 edition of its guide CA44: National Insurance for company directors.New guidance on pension lump-sum allowancesHMRC has published the following new guidance which explains in straightforward terms how the individual lump sum allowance and lump sum death benefit allowance work from 6 April 2024, following abolition of the lifetime allowance:•find out the rules around Individual lump sum allowances•how to tell HMRC about a lump sum death benefit chargeHMRC has also updated its guidance ‘Protect your pension lifetime allowance’ to reflect the deadlines for applying for fixed protection 2016

Weekly tax highlights ― 22 July 2024

Weekly tax highlights ― 22 July 2024Direct taxesHMRC form P1000 published onlineHMRC has published form P1000 online for the first time, it having previously only been available on request from HMRC. The form is used to advise HMRC of the personal representatives on a death and also to authorise someone to act for them, rather than completing a form 64-8. The form is not electronic and will need to be printed and completed in hardcopy.Property taxesLand transaction tax reliefs: consultation responses summarisedThe Welsh government’s report summarises the contributions received to its consultation on land transaction tax (LTT) reliefs. In response, the Welsh government intends to undertake further work, taking into account comments received, before making decisions on potential changes to LTT reliefs. The report sets out key issues considered, under the following main sections:•multiple dwellings relief ― abolition received a mixed response, with respondents on both sides raising various problems and challengessix dwellings rule ― most favoured retaining the rule, with concerns raised around potential negative impacts on larger investors, housing supply, and the Welsh economy if abolishedsocial housing ― respondents agreed with the extension of existing relief to Welsh local authorities for social housingInternationalHMRC brings together pillar 2 guidance HMRC has brought together its collection of guidance on the multinational top-up tax and domestic

Non-resident SDLT surcharge for residential property

Non-resident SDLT surcharge for residential propertyA 2% SDLT surcharge applies to land transactions of residential property in England and Northern Ireland by non-residents. The rates apply to purchases of freehold and leasehold property and to SDLT payable in respect of rents on the grant of a new lease (though only where the term of the lease is over seven years).The surcharge applies in addition to various other rates, including the residential higher rates (sometimes referred to as the ‘additional dwelling supplement’) and the flat 15% rate for non-natural persons.The existing residence rules for other taxes do not apply for SDLT. Instead, separate residence tests apply for SDLT, as discussed below. It is important to look at the detail of the test, as sometimes the outcome is counter intuitive. For example, a UK resident close company is considered non-resident for SDLT if it is controlled by one or more non-residents.It is important to remember that if the transaction is eligible for an SDLT relief that reduces or exempts a charge to SDLT, this also applies to the non-resident surcharge. For a list of SDLT reliefs, see the Stamp duty land tax ― basic rules for companies guidance note.The increased rates for non-resident transactions apply to land transactions with an effective date of 1 April 2021 onwards.HMRC has published full guidance on the non-resident surcharge on the GOV.UK website and in SDLTM09850.SDLT rates to which the non-resident surcharge appliesThe increased rates for non-resident transactions are 2% more than the effective rate

SDLT on property disposals by individuals

SDLT on property disposals by individualsStamp duty land tax (SDLT) is generally payable on the purchase or transfer of property or land in the UK where the amount paid is above a certain threshold. If the consideration is over £40,000, the transaction must be notified to HMRC on an SDLT return, even though no SDLT may be due. When it was originally introduced, SDLT applied to all UK land transactions. Devolution has resulted in Scotland and Wales introducing their own regimes.From 1 April 2015, land and buildings transaction tax (LBTT) applies to land transactions in Scotland. For details of LBTT, see Sergeant and Sims on Stamp Taxes AA12–AA22 (SSSD, AA[AA351]–SSSD, AA[AA862]). See also the guidance on the Revenue Scotland website. From 1 April 2018, land transaction tax (LTT) applies to land transactions in Wales. For details of LTT, see Sergeant and Sims on Stamp Taxes AA23–AA34 (SSSD, AA[AA901]–SSSD, AA[AA2115]). See also the guidance on the Welsh Revenue Authority website. Whilst the underlying rules applying to LBTT, LTT and SDLT are broadly similar in nature, the taxes are not identical. The rest of this guidance note covers the law which applies to transactions in England and Northern Ireland.Since SDLT is normally paid by the purchaser in the transaction, there are only limited points for the vendor to consider. SDLT is discussed further in the SDLT on property acquisitions by individuals guidance note.Linked transactions and multiple dwellings reliefA request by the purchaser for the vendor to split the disposal into a

Weekly case highlights ― 19 February 2024

Weekly case highlights ― 19 February 2024These are our brief notes and thoughts on cases published in the last week or so which caught our eye and are likely to be of particular interest to tax practitioners. Full case reports and commentary on most of these cases will be included within our normal reference sources in the coming weeks.Employment taxShivani Mathur v HMRCThe Upper Tribunal has dismissed the taxpayer’s appeal relating to the termination of employment provision in ITEPA 2003, s 401 confirming, once again, its wide scope. The taxpayer received a payment of £6m from her former employer in settlement of employment tribunal proceedings but argued that it arose from negotiations based on the discrimination and victimisation she had experienced during her employment, rather than as a result of the termination. As often with Upper Tribunal decisions, there is little here that wasn’t in the original FTT decision holding that s 401 applied. The UT upheld the decision because there were no errors in law and there was sufficient evidence to support the FTT’s finding that the termination was central to the claims of discrimination in the employment tribunal proceedings. Capital gains taxArshad Mahmood v HMRCNo doubt there are many taxpayers who wish that they could turn back time and undo a transaction when they discover the unpleasant tax consequences. That was what the taxpayer attempted here, relying on the common law doctrine of ‘common mistake’ under which a transaction may be void if the parties enter into

Tolley tax case tracker

Tolley tax case trackerThis tax tracker tool displays the current status and most recent developments of direct tax cases being heard by the Upper Tribunal (UT), the Court of Appeal, the Court of Session, the Supreme Court and the EU Court of Justice as at 8 October 2024. It is updated on a rolling monthly basis.The tracker is split into three parts:•Cases subject to an appeal•Cases potentially subject to an appeal, and•Finalised tax casesRecent updates are shown below in bold.Cases subject to an appealThis section of the tracker shows those cases that are currently subject to an appeal.Name of parties and citationCurrent statusA D Bly Groundworks and Civil Engineering Limited v HMRCCA/2024/001410; [2024] UKUT 104 (TCC); [2021] UKFTT 445 (TC)Corporation tax-provision for pensions liabilitiesThe FTT found that the primary purpose of entering into an unfunded pension arrangement (which had been notified under DOTAS) was to reduce their corporation tax liability without incurring any expenditure; and that the liability to pay pensions under those arrangements did not generate deductible expenses (even though there were pensions being paid out). The FTT also found that the creation of such a scheme is not a payment or transfer from which benefits will be provided under the EBT regime.The UT dismissing the appeal upheld the FTT’s conclusion that the pension liabilities were not incurred wholly and exclusively for the purposes of a trade and accordingly the deductions claimed should not be allowed. While not

SDLT on property acquisitions by individuals

SDLT on property acquisitions by individualsIntroductionStamp duty land tax (SDLT) was introduced for land transactions with effect from 1 December 2003. Whereas stamp duty was a tax on documents, SDLT is a tax based on the acquisition of a chargeable interest, whether or not evidenced in writing. When it was originally introduced, SDLT applied to all UK land transactions. Devolution has resulted in Scotland and Wales introducing their own regimes.From 1 April 2015, land and buildings transaction tax (LBTT) applies to land transactions in Scotland. For details of LBTT, see Sergeant and Sims on Stamp Taxes AA12–AA22 (SSSD, AA[AA351]–SSSD, AA[AA862]). See also the guidance on the Revenue Scotland website. From 1 April 2018, land transaction tax (LTT) applies to land transactions in Wales. For details of LTT, see Sergeant and Sims on Stamp Taxes AA23–AA34 (SSSD, AA[AA901]–SSSD, AA[AA2115]). See also the guidance on the Welsh Revenue Authority website. Whilst the underlying rules applying to LBTT, LTT and SDLT are broadly similar in nature, the taxes are not identical. The rest of this guidance note covers the law which applies to transactions in England and Northern Ireland only.This guidance note focuses on the rules for transactions where the purchaser is an individual. For details of the SDLT rates that apply to these transactions, see the SDLT on property acquisitions by individuals ― tax rates guidance note.For the rules that apply to companies, see the Stamp duty land tax ― basic rules for companies guidance note.OverviewLand transactions are chargeable to SDLT,

Spring Budget 2024

Spring Budget 2024Chancellor Jeremy Hunt delivered his Spring Budget on 6 March 2024, setting out further proposals to stimulate growth in the economy in advance of a General Election.The key changes / announcements made are summarised below. Detailed analysis will follow in all of our usual sources.Personal taxesAbolition of the remittance basis of taxationUK resident individuals who are not domiciled or deemed domiciled in the UK currently have the choice to pay tax on the remittance basis (meaning UK tax is only paid on foreign income and gains to the extent that these are brought to the UK in the tax year) or the arising basis (meaning UK tax is payable on worldwide income and gains arising in the tax year).From 6 April 2025, the remittance basis of taxation is expected to be abolished. This is to be replaced by a new regime linked to the number of years of UK residency.Individuals will not be taxed in the UK on their foreign income and gains for the first four tax years of UK residency, under a new system called the ‘foreign income and gains’ regime (also known as FIG). They will be free to bring the foreign income and gains arising in those tax years to the UK without suffering a UK tax liability, in a departure from the existing remittance basis rules. They will also not pay tax on non-resident trust distributions. They will not however be entitled to a UK personal allowance or annual exempt amount. From

Weekly case highlights ― 12 February 2024

Weekly case highlights ― 12 February 2024These are our brief notes and thoughts on cases published in the last week or so which caught our eye and are likely to be of particular interest to tax practitioners. Full case reports and commentary on most of these cases will be included within our normal reference sources in the coming weeks.Business taxBAT Industries plc and others v Commissioners of Inland Revenue and anotherLitigation under the Franked Investment Income (FII) Group Litigation Order, which concerns the pre-April 1999 regime for overseas dividends, has now been ongoing for more than 20 years. The technical issue, whether the regime contravened EU law, was settled a number of years ago and is, anyway, no longer relevant to anyone other than companies whose claims are yet to be resolved. This case follows the Supreme Court’s decision in 2020 on whether the claims were out of time under Limitation Act 1980, s 32. This requires claims arising from a mistake of law to be made within six years of the time when the claimant discovered, or could with reasonable diligence have discovered, the mistake. Although the Supreme Court set out the principles to be applied, it considered that it did not have the evidence needed to determine when the six-year period actually began. This decision is concerned solely with that issue. The court decided that the clock started running on 6 June 2000, the date of the EU court decision in Verkooijen, which concerned the Dutch system

Stamp duty land tax ― basic rules for companies

Stamp duty land tax ― basic rules for companiesIntroductionStamp duty land tax (SDLT) is generally payable on the purchase or transfer of interests in land and buildings in England and Northern Ireland where the amount paid is above a certain threshold. In addition, most of these transactions must be notified to HMRC on an SDLT return (also known as a land transaction return), even if no tax is due. See the SDLT ― administration guidance note for further commentary on notifiable transactions.From 1 April 2015, land and buildings transaction tax (LBTT) applies to land transactions in Scotland. For details of LBTT, see Sergeant and Sims on Stamp Taxes AA12–AA22 (SSSD, AA[AA351]–SSSD, AA[AA851]). See also the guidance on the Revenue Scotland website. From 1 April 2018, land transaction tax (LTT) applies to land transactions in Wales. For details of LTT, see Sergeant and Sims on Stamp Taxes AA23–AA34 (SSSD, AA[AA901] – SSSD, AA[AA2101]. See also the guidance on the Welsh Revenue Authority website. Whilst the underlying rules applying to LBTT, LTT and SDLT are broadly similar in nature, the taxes are not identical. The rest of this guidance note covers the law that applies to transactions in England and Northern Ireland only. This guidance note focuses on the rules for transactions where the purchaser is a company. For details of the SDLT rates that apply to these transactions, see the Stamp duty land tax ― basic rules for companies ― tax rates guidance note.For the rules that apply to individuals,