Expenditure on business property.
My client runs a business renting out self-storage spaces and the business also provides insurance for the goods his clients keep in his storage compartments.
He has incurred capital good scheme (CGS) in the course of property renovation.
Could it be argued the expenditure on the business is exclusively attributable to taxable storage? Would sperate partial exemption and CGS calculations need to be done for previous years and does the de minimis test apply to CGS items?
Readers’ thoughts would be greatly appreciated.
Query 20,515– Black Swan.
Can relief be claimed for gain on sale of shares?
Our client is a limited company with only two shareholders. They are long time friends and run a successful building, but one shareholder (S) intends to relocate with his wife.
The plan, as S has explained to me, is that he would sell his shares to the other shareholder (T). Once he has relocated, S would then start up his own company, operating the same business, but from his new location.
T, the other shareholder, does not object to S’s plan as it will not affect the profitability of his business.
I have a nagging doubt, though, on which I would appreciate Taxation readers’ thoughts. Will S be able to claim any relief for the gain on the sale of the shares?
As far as I can see all of the conditions for business asset disposal relief would be met, but does the fact that the sale is to the other shareholder make any difference to the analysis?
Query 20,516– Huron.
Is lifetime transfer a settlor-interested trust?
A few years ago, before I became her adviser, my client made a lifetime transfer of her principal residence into trust.
The beneficiaries of the trust are herself and her two adult children. The conditions of the trust allow for her to remain living in the property and entitle her to any income or gains arising on the property during her lifetime.
I can’t see any benefit to her in doing this and indeed I wonder quite what the previous adviser had in mind when suggesting it.
I’m not sure I understand the reference to entitlement to income as there will be no income while she remains living in the house. Have I missed something?
Query 20,517 – Vinyl.
Can kitchen supplier’s fee be separated to save VAT?
I have a client that has just started a new business supplying and fitting kitchens. She is VAT registered.
She has asked about disbursing the costs of electricians and plumbers used on the jobs to the final customers, as neither of them are VAT registered.
The thought process is that the customer can engage these traders directly and not have to suffer the VAT, but it feels a bit messy.
I wondered if it would be acceptable to HMRC if the customer makes three separate payments but my client wants the customer to only make one payment to her because it might look a bit unprofessional to have three payments made for each job. She would then pay the subcontractors as a disbursement. But would separate payments make it a single supply by my clients for VAT purposes?
My thinking is that VAT should be charged on the full value of each job by my client but do readers think there is an alternative way of structuring the deals to save VAT?
Query 20,518– Kitchen Kitty.
