While always ensuring we remain non-partisan, as tax advice is such a large part of our business here at Wilkins Kennedy, we have been watching the general election countdown with interest, taking particular note of the tax promises made on both sides of the house.
The possibility of a change in Government can make some clients understandably nervous, but ballot boxes are not necessarily anathema to those who are looking to take advantage of existing tax-favoured reliefs in the short to medium term. Instead, take some sage advice on the best ways to spend these twelve days before a pre-Christmas election.
While election day is 12th December, the winner may not be crowned for days, or even weeks afterwards, meaning it is highly unlikely any tax changes floated by the main parties will take effect from election day. It is far more likely that this any changes will be applied from the date of a new Budget, or possibly the start of the 2020/21 tax year on 6th April 2020. Given previous seasonal recess periods have lasted until 8th or 9th January, it would be a Christmas miracle if a Budget could be convened before January, so the chances are that no matter how eager the Chancellor, a new Budget is not likely to be scheduled sooner than late January 2020.
Although changes are unlikely before January 2020, those in the process of completing a transaction may be best served by making sure all the finer points are resolved as soon as possible. That said, don’t agree to a poor deal just to cross the finish line in case of tax changes; the old adage of ensuring the tax tail does not wag the deal dog is very much in point here.
Those feeling certain of a change of Government, and one that may have a detrimental impact on a business sale, for example, could consider taking steps now to protect the existing tax position in advance of the final sale date. This could include taking action to preserve a 10% rate of tax under the entrepreneurs’ relief provisions, although we would advise clients to consider this very carefully. Such planning is rarely risk-free and could have potential unforeseen future impacts. If you would like to discuss the options further, please contact your local Wilkins Kennedy tax specialist.
While removal of tax benefits has not featured highly in any of the main parties’ manifesto promises, inheritance tax (IHT) reliefs are a currently hot topic, and the recent Office for Tax Simplification report suggested some sweeping changes could be coming soon. Those thinking of gifting assets that might qualify for Agricultural Property Relief (APR) or Business Property Relief (BPR), or both, might prefer to take action sooner rather than later in case of future legislative changes, whomever is in the driving seat.
Other generous tax reliefs, such as Research and Development tax credits, are another area in which a new Government could make tax savings. Here, claims can be made directly after the accounting period ends, and you then have a 24 month period before the claim is out of time. If you make a claim early, your relief should be protected if the relief is reduced. If, instead, the tax benefits become more generous, you can always submit a revised return within the claim period to benefit from the uplift.
Finally, such a period of reflection offers an ideal opportunity to review any family businesses or interests in light of any possible changes and revisit remuneration and/or dividend policies with an eye on wealth planning for the future. Again, your local Wilkins Kennedy tax specialist would be happy to help.
“Get Brexit Done” was the simple message that led to a Conservative majority in December’s general election. This has meant Boris Johnson’s ‘Brexit bill’ passed easily through the House of Commons. Indeed, the bill has now received Royal Assent so the EU (Withdrawal Agreement) Act is now place...
Many of you will be aware that the government introduced legislation, commonly referred to as “the loan charge”, in the Finance Act 2016 to address the tax loss to the Exchequer from disguised remuneration schemes. In accordance with the legislation, any loans taken since 1999 which remain outstanding on 5 April 2019 became taxable as income on that date.
From 6 April 2020 changes to the way UK resident individuals, trustees and personal representatives report the disposal of UK and overseas residential property come into effect. The changes will mainly affect those disposing of a second home, a rental property, or properties that have not been occupied as a main residence throughout the period of ownership.
Returning expats have many opportunities to plan to mitigate their UK tax exposure, provided that such planning is undertaken well in advance of their move to the UK. In this insight, we cover some of the key UK tax issues affecting British expats who are returning to the UK...
Business Property Relief (BPR) is a very valuable Inheritance Tax (IHT) relief for privately owned businesses and was subject to a recent review by the Office for Tax Simplification (OTS). This Insight highlights some key points to qualify for the relief.
While always ensuring we remain non-partisan, as tax advice is such a large part of our business here at Wilkins Kennedy, we have been watching the general election countdown with interest, taking particular note of the tax promises made on both sides of the house...
Despite another extension to the Brexit date it is important for employers to consider the impact of the UK leaving the EU on their workforces, particularly those with employees working overseas in the EU, EEA or Switzerland. Although it being an unlikely outcome, in the event of a no-deal Brexit, there may be implications for UK employers who have employees working in the EU, the EEA or Switzerland.
Charitable and non-profit making bodies are often under pressure to maximise their income-generating activities through exploiting their assets to the maximum possible extent. Whilst the reason for doing this is entirely understandable, the associated potential tax consequences can be overlooked, which can, in turn, give rise to unexpected tax liabilities. In this article, John Howard, Partner and head of Not-for-Profit at Wilkins Kennedy provides some thoughts on the issues arising.