News

The August edition of the HMRC trusts and estates newsletter has been published:

Inheritance tax treatment of compensation payments

HMRC Trusts and Estates have confirmed the treatment of compensation payments for inheritance tax purposes on the basis it can cause some difficulties for taxpayers and their agents, especially when compensation is received after the date of death.

The complex system for reporting and taxing employee benefits and expenses is ripe for an overhaul, according to an interim report from the Office of Tax Simplification (OTS).

The document identifies issues for further study, including the payrolling of benefits, abolishing the £8,500 higher-paid threshold, and smoothing the differences between tax and National Insurance rules.

The Revenue has moved to clarify its approach to tackling stamp duty land tax (SDLT) dodging.

The department’s action follows a meeting between the British Property Federation, the Chartered Institute of Taxation, the Law Society, the Stamp Taxes Practitioners’ Group and HMRC Stamp Taxes, to discuss SDLT group relief and the application of the targeted anti-avoidance rule in FA 2003, Sch 7 para 2(4A), in the context of intra-group asset transfers following corporate acquisitions.

The Treasury’s controversial new employment status is set to go in to operation at the start of next month.

The employee-shareholder arrangement will see staff members give up a number of workers’ rights from 1 September in exchange for at least £2,000 of tax-friendly shares in their employer’s company.

Finance Act 2013 provides reliefs for the shares, meaning income tax and National Insurance will usually not be chargeable on the first £2,000 of share value received, and there will usually be a capital gains tax exemption for up to £50,000 of shares.

HMRC have issued updated guidance, a new tool and form to allow pension scheme members to apply for fixed protection 2014.

Taxpayers will need to know their National Insurance number to use the form, which must to be completed in one attempt. It cannot be saved and reopened later. Onscreen assistance can be accessed via the question mark icons. (Those who prefer not to use the online service can complete a paper version.)

...compliance; SEIS; ATED; disincorporation; defaulters

HMRC have set up a dedicated team to identify the cause of difficulties for PAYE schemes in reconciling the difference between the tax the department says is due and that which the employer believes is due.

The team is working with schemes through their examples to examine what is causing the discrepancies, with the aim of finding resolutions.

The Revenue hopes the new set-up will form understanding of the issue in greater depth, and lead to steps necessary to prevent the problems arising in future.

Employers are risking problems for their workers by entering 0.00 in the field for annual amount of occupation on the full payment submission (FPS) in cases where no occupational pension is paid, the Revenue has warned.

HMRC are inviting claims for overpaid stamp duty land tax (SDLT) from charities that purchased a property jointly with a non-charity purchaser.

The UK government has received notification from the European Commission (EC) that it is to open a formal investigation relating to exemptions and reliefs within the aggregates levy.

The commission made it clear that some exemptions and reliefs do not contain state aid and the aggregates levy in itself does not constitute an unlawful state aid. The investigation has arisen as a result of a submission in 2002 from the British Aggregates Association (BAA) to the EC, arguing that the levy contained state aid.

HMRC have announced new arrangements for verifying visits to taxpayers by debt management and banking field force collectors, which can take place at a taxpayer’s home or business premises.

...seizure; GAAR; Agent Update; pensions