Property Tax – The Lease Premium Rules Part One

 Property Tax  Comments Off on Property Tax – The Lease Premium Rules Part One
May 302013
 

When a landlord grants a lease, the tenant may be required to pay a premium in addition to regular rental payments. How is this premium taxed?

In this article we shall find that the answer is by no means a simple one. If the lease is a long lease, the premium is taxed as a capital receipt, but if the lease is a short one, part of this sum is taxed as income.

The meaning of what is long and short, and how much of the premium is taxed, will become clear in the following discourse.

(This article can be downloaded in pdf format at Academia.edu.)

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Vodafone and Tax Avoidance

 Corporate Tax, Tax Avoidance  Comments Off on Vodafone and Tax Avoidance
May 232013
 

Tax avoidance and multinational corporations have featured prominently in the news in recent weeks.

We have seen the likes of Google and Starbucks being called to appear before the Public Accounts Committee to explain their tax practices, Prime Minister David Cameron talking about the need for global action against tax evasion and aggressive tax avoidance, and even Leader of the Opposition Ed Miliband,  saying that he would rewrite the corporate tax rules (why? Doesn’t he think the new GARR will do the trick?).

Perhaps the phrase which best sums up the view of those who consider these companies to be engaging in suspect tax planning is that of Margaret Hodge, who chairs the Public Accounts Committee:

“We’re not accusing you of being illegal, we’re accusing you of being immoral”

Now it is all very well to have these debates about how and why these multinationals manage to minimise their tax bills. But what concerns me is that, reading the various press reports, it is never clear just what exactly the company involved has done that is so immoral. And if we don’t know what this is, how can we have a debate about it? Continue reading »

Starting a Property Business

 Property Tax  Comments Off on Starting a Property Business
May 092013
 

Let us suppose that you’ve been fortunate enough to have been left a substantial sum of money in your great aunt’s will. You have decided not to splash out on a party to celebrate, or to spend the lot on a round the world trip. Instead, you have decided to be sensible and invest your inheritance so that you’ll have a secure nest egg for your old age.

But where to invest? The banks offer pitiful interest these days, and you don’t really fancy the stock market. What about property? The headlease on the local fish and chip shop is for sale, and there are some student flats on offer – you’ve read somewhere that these particular types of investment ought to provide you a reasonably safe home for your money.

After considerable thought, you take the plunge and become a property tycoon… Continue reading »

The Degrouping Rules and the Subgroup Exception – an Overview

 Corporate Groups, Corporate Tax, IP Tax  Comments Off on The Degrouping Rules and the Subgroup Exception – an Overview
May 062013
 

As has been stated in previous articles, the degrouping rules are designed to prevent assets from being smuggled out of a group tax free under the protection of a corporate wrapper. This is achieved by imposing a tax liability when a company acquires an asset from a fellow group member and subsequently leaves the group within the next 6 years. 

But for every rule, there is an exception. Continue reading »

Incorporating Goodwill – Can you claim tax relief when you become a company?

 Corporate Tax, IP Tax  Comments Off on Incorporating Goodwill – Can you claim tax relief when you become a company?
May 052013
 

One of the key tax issues when a sole trader or partnership incorporates an existing business is the treatment of goodwill. In particular, can the new company claim tax relief for writing down the goodwill after acquiring the business?

This should be possible for those who started business recently – by which we mean, those businesses set up from 1 April 2002 onwards. But if your business is more established, then we have a problem…

UPDATE From 3 December 2014 it is no longer possible to claim tax relief for internally generated goodwill in line with the accounts when incorporating a business. This is due to the announcement in the Autumn Statement of 2014 restricting deductions for goodwill when a close company acquires a business from an individual or partnership, and the company is related to the seller(s). 

However, the following article is still relevant to the question of when a person becomes entitled to shares in a company that are to be issued to him under a contract.

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