Tax Briefing January 2020

NEWS UPDATES

It has been announced in January that the delayed Budget Day will be 11 March and the Scottish Government’s Budget will be announced on 6 February.

Here is a selection of other tax news items from January …


Cryptoassets

HMRC continues to update its policy papers on the tax treatment of crypto assets. The latest versions of their guidance for individuals and for businesses can both be found here.

Company non-resident landlords

Readers are reminded that from 6 April non-resident companies will pay corporation tax instead of income tax on profits from UK property.

HMRC guidance, Paying Corporation Tax if you’re a Non-resident company landlord, deals with issues such as transitional rules, the requirement to file corporation tax returns and relief for finance costs and losses.

Residential properties

Readers are also reminded that from 6 April UK residents with a capital gain from a disposal of residential property are required to complete a standalone online return and pay any tax due within 30 days of completion.

The Chartered Institute of Taxation has received confirmation from HMRC that the new rules do not apply if unconditional contracts are exchanged prior to 6 April 2020 even if completion takes place on or after that date. 

Loan charge

The much criticised loan charge continues to feature in the tax news. HMRC have published and updated a number of documents following publication on 20 December of the recommendations from the independent review:

Disguised remuneration: Independent loan charge review

Implementation of changes to the loan charge

Time to pay arrangements

TAX CASE DECISIONS 

Rogers & Anor [2019] UKUT 0406 (TC) – Notices to file and late filing penalties

 The Upper Tribunal has confirmed that in order to impose a late filing penalty, HMRC must prove that a valid notice to file a return has been served. If they fail to produce any evidence then the First-Tier Tribunal must set aside any penalties charged for the alleged failure to comply with a notice to file. If HMRC provides some evidence then it is still a matter for the FTT to review the evidence. However, and overturning earlier FTT decisions, the Upper Tribunal has said it is not necessary for the notice to file to have been issued by a named HMRC officer rather than by computer. The issue of the notice only needs to have been under the authority of an officer of HMRC.

Rogers & Shaw

Goodfellow & Goodfellow [2019] UKFTT 0750 (TC) – SDLT and mixed-use properties

The purchasers paid SDLT at full rates on the purchase of a substantial property but the later claimed a refund of tax on the grounds that the property was mixed-use and taxable at the lower rates. The Tribunal dismissed the claim; a room used as an office was suitable for use as a dwelling, the stable yard and paddocks were part of the grounds and commensurate with the size of the dwelling-house, and rent paid by a neighbour for grazing horses on the paddocks was for a nominal peppercorn rent and was not a commercial arrangement. The decision was wholly consistent with the earlier decision in Hyman & Anor [2019].

 Goodfellow & Goodfellow

 Root 2 Ltd [2019] UKFTT 0744 (TC)

This case concerns a failed attempt to replace individuals’ taxable earnings with tax-free spread betting gains. It confirms that the approach established in the landmark case of WT Ramsay Ltd can be applied to employment taxes if the arrangements involve a number of elements which are clearly intended to operate as a whole. Although in this case the tax planning arrangements also failed on two other counts as well as the Ramsay principle.

Root 2 Tax Ltd


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