Tax Miscellany

Furnished holiday lets

Labour plans to stop these being treated as business income in 2010 were shelved, and the relief will extend to properties in the EU from 6 April. However, days let will have to increase to 105 from the current limit of 70. Final details awaited but you may need to boost your marketing effort as competition for lettings increases.

New HMRC guidance

The new HMRC guidance on residence, domicile and the remittance basis was issued on 29 December, muddying the waters even more. Genuine non-resident visitors will have to count their 91 days of visits with greater care. UK residents trying to escape will have to demonstrate a definite breaking of ties with the UK – do sell or let your house, and don’t leave the children behind at boarding school! More guidance is awaited.

Non-Doms

The Coalition said last year it would review the tax system for Non-Doms to ensure they make a “fair contribution” to reducing the UK deficit. The £30,000 fee to preserve the “remittance basis” of tax might go up, or its application to people resident in the UK for 7 out of the past 9 tax years, might start sooner.

Increased penalties from 6 April.

On 3 February, HMRC announced that UK residents who fail to declare income and gains connected with specific countries will face greater penalties – 200% if your deposits are in Belize, Monaco or Panama; 150% if in BVI, Jersey and Switzerland; 100% if in the Caymans, Guernsey or Isle of Man. You have been warned!

EIS and VCT

These and approved pension schemes represent “acceptable” methods of tax avoidance. But with the pension annual savings allowance coming down to £50,000 from 6 April, EIS (20% up to £500k) and VCT (30% up to £200k) income tax reliefs may have greater attractions, despite greater investment “risk”.

5th April deadlines approaching
  • Last chance to avoid 5% SDLT on buying property over £1m
  • Last chance to avoid restrictions on pensions tax reliefs (£255,000 down to £50,000)
  • Last chance to shelter high earnings/bonuses from new Disguised Remuneration legislation in EBTs or EFRBS

The law and practice referred to in this article or webinar has been paraphrased or summarised. It might not be up-to-date with changes in the law and we do not guarantee the accuracy of any information provided at the time of reading. It should not be construed or relied upon as legal advice in relation to a specific set of circumstances.

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