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The neglected regime

09 June 2009 / Ray Magill
Issue: 4209 / Categories: Comment & Analysis , Income Tax , Inheritance Tax
HMRC need to update their guidance on the pre-owned asset regime, says RAY MAGILL

KEY POINTS

  • HMRC guidance on the pre-owned asset charge is out of date.
  • FA 2006 s 80 made changes to the legislation.
  • Many taxpayers may have missed the chance to make an election.
  • Action may be required on behalf of affected clients.

Judging that the ‘gifts subject to a reservation of benefit’ regime in Finance Act 1986 was being circumvented too easily the Government introduced the regime now contained in FA 2004 Sch 15.

The legislation is much more far-reaching than was probably intended (or perhaps just very poorly drafted) and practitioners cannot afford to be relaxed.

This is partly because of the bad drafting which can sometimes have unintended effects but mostly because the explanations and advice published...

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