News

Receipts hit a five-year high after 25% rise in 2014-15

Capital gains tax on compensation and damages.

Tax charity calls for improved guidance

Changes to the tax regime for unauthorised unit trusts are the subject of new guidance released by HMRC.

A trust with at least one exempt unit holder and one non-exempt unit holder for the period from 24 May 2012 to 5 April 2014 will be a mixed unauthorised unit trust, and will complete its tax return (SA900) in the same way as for earlier tax years.

The government has scrapped plans to abolish the capital gains tax (CGT) main residence election.

Treasury officials intended to replace the measure with fact-based tests to decide which property would benefit from only or main residence relief, as part of proposals to implement a CGT charge on UK non-residents.

But a change of policy means a non-residents investing in UK residential property and UK residents investing in non-UK property will instead have to meet an occupation requirements.

Capital gains will remain eligible for entrepreneurs’ relief (ER) when realised even when they have been deferred into investments that qualify for the enterprise investment scheme or social investment tax relief, the chancellor announced in yesterday’s autumn statement.

The measure takes immediate effect, and is good news for taxpayers wishing to re-invest gains into unquoted trading companies. The previous system saw such investors facing the full capital gains tax (CGT) rate of 28%, rather than ER’s 10%

HMRC plan to withdraw three extra-statutory concessions (ESCs):

The government has published an update to the consultation Implementing a Capital Gains Tax Charge on Non-Residents, covering the extension of capital gains tax (CGT) to non-resident individuals and close companies.

The consultation, launched in March, explained how pension funds and other diversely owned collective investment funds were not intended to be brought in scope of the extension of CGT to non-residents.

HMRC are consulting on legislation to replace the long-standing extra-statutory concession (ESC) D33.

The concession covers a number of circumstances in which a capital sum is received as compensation or damages for a right of action that is capital in the hands of the recipient and subject to capital gains tax under TCGA 1992, s 22.

It does not apply where a capital sum has been derived from any other type of asset including statutory rights or contractual rights.

It would be appropriate for the Revenue to allow the taxpayers’ claims for Jelley losses in certain cases, according to a department body for advising on tax dispute policy.

The government is set to extend its radical plan to remove the main residence election for non-UK residents, according to a leading tax specialist.

Adviser and author Kevin Slevin learned from the Treasury that a mooted shake-up of the capital gains tax regime relating to property will affect all homeowners from April 2015.

The terms of HMRC’s concession covering capital gains tax (CGT) on damages have been reduced to make only the first £500,000 of compensation exempt.