Budget 2015 Entrepreneurs’ Relief – New Rules on Joint Ventures and Partnerships

 CGT, Corporate Tax  Comments Off on Budget 2015 Entrepreneurs’ Relief – New Rules on Joint Ventures and Partnerships
Mar 302015
 

This year’s Budget has not been very kind to entrepreneurs’ relief, the 10% tax rate that applies when an individual sells a business. We’ve already seen in last year’s Autumn Statement, the introduction of rules to restrict the relief when a business incorporates. This year’s Budget saw two more measures aimed at people intending to access the relief when they shouldn’t be.

In this article we shall look at the new rule on joint ventures and partnerships. What was the law before the Budget, what is the law now, and why was the law changed? Continue reading »

Rollover Reliefs and the Replacement of Business Assets Part Three – Rolling IP into Shares

 Corporate Groups, Corporate Tax, IP Tax  Comments Off on Rollover Reliefs and the Replacement of Business Assets Part Three – Rolling IP into Shares
Feb 222015
 

This is the last article in our series on asset rollovers. In Part One, we looked at capital assets, in Part Two we saw how IP rollovers work. In this part we shall see how it is possible to sell an IP asset and defer the tax by reinvesting the proceeds in the shares of a company, effectively looking through the corporate vehicle to the underlying IP that it holds.

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

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Rollover Reliefs and the Replacement of Business Assets Part Two – IP Rollovers

 CGT, Corporate Tax, IP Tax  Comments Off on Rollover Reliefs and the Replacement of Business Assets Part Two – IP Rollovers
Feb 202015
 

This is the second article in our series on asset rollovers. In Part One, we looked at capital assets, in this part, we shall look at IP (we shall use the term IP to cover all intangibles including goodwill).

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

Recall that a rollover is a means of deferring tax when a business asset is sold and replaced with another. The idea is that since the sale proceeds have been reinvested, the tax doesn’t become due until the second asset is sold and the funds become available.

Continue reading »

Rollover Reliefs and the Replacement of Business Assets – Part One – Capital Assets

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Feb 092015
 

This is the first in a series of articles about asset rollovers, a tax relief available to businesses when one trade asset is exchanged for another. There are two types of rollover, one for capital assets such as land, the other for intangibles such as IP and goodwill (which we shall refer to collectively as IP).

Both types of relief are similar in their operation, but as we shall see, there are important differences. In this article we shall be concentrating on capital assets.

(This article can be downloaded in pdf format from Academia.edu.)
Continue reading »

Entrepreneurs’ Relief and Goodwill – what did the Autumn Statement say?

 CGT, Corporate Tax, IP Tax  Comments Off on Entrepreneurs’ Relief and Goodwill – what did the Autumn Statement say?
Jan 252015
 

Updated July 2015

This article was updated just days before the Summer Budget which took place on 8 July 2015. It is now the case that a company acquiring a business will no longer be able to claim tax relief on goodwill being amortised in the accounts. This is irrespective of whether the business was acquired from a related party. 

In this article we are going to take a closer look at the new rules which seek to restrict tax relief for goodwill when a business is sold. These restrictions were announced in the recent Autumn Statement,  and have since become law, being incorporated into the first Finance Act of 2015. The new rules  are aimed at individuals or partnerships who decide to incorporate their business. What is striking is that the new rules go further than the mischief that they are intended to counteract. Continue reading »

Mar 242014
 

The following is a summary of the main measures affecting capital allowances that came out of the recent Budget. There isn’t a great deal to say, though the increase in the annual investment allowance for plant and machinery expenditure will certainly be welcome.

In our introductory article we concentrated on plant and machinery, as this is the most common type of allowance. However, we also mentioned that there are other types of allowances available – we shall encounter some of these in the following summary. Continue reading »

A Basic Introduction to Capital Allowances

 Capital Allowances, Corporate Tax, Property Tax  Comments Off on A Basic Introduction to Capital Allowances
Feb 132014
 

This article is a basic introductory guide to capital allowances. What are they, what are the basic rules about claiming this valuable tax relief, and is it always a good idea to claim?

We shall be answering these questions in the following discourse. Subsequent articles will deal with the special types of allowance available for plant and machinery, and we shall end the series by looking at the new rules for fixtures.

But first, the most important question of all…

Continue reading »

Autumn Statement 2013 – Buying Corporate Tax Losses – new rules for Holding Companies

 Corporate Groups, Corporate Tax, Tax Avoidance  Comments Off on Autumn Statement 2013 – Buying Corporate Tax Losses – new rules for Holding Companies
Jan 242014
 

There has been a welcome amendment to the rules that prevent the carry forward of corporate tax losses where there have been significant changes to the underlying business activities. The rules apply when a company undergoes a change of ownership, and they make perfect sense in the context of a company takeover.

However, one would not expect tax losses to be restricted when the corporate group has undergone an internal restructuring. There is less justification for this, given that a restructuring doesn’t usually result in a change in the underlying economic ownership of the assets involved.

And indeed, as we shall see, the rules don’t apply when the target is a subsidiary that is being transferred from one group company to another. Unfortunately, the exception doesn’t extend to the introduction of a new holding company.

This situation is to be remedied in the next Finance Act. The changes will take effect from 1 April 2014. Continue reading »

Nov 252013
 

The following is an overview of some of the main tax issues that arise when a business is sold. We shall assume in this case that we have a corporate buyer and a corporate seller. We shall also assume both parties to the transaction are subject to UK corporation tax and that the business is a trading operation. Continue reading »