Gordon W Buist (EQ Accountants) explains how the publication of Spotlight 63 on landlord tax planning schemes has exposed a fundamental flaw with incorporation relief from CGT.
For many years the incorporation of a sole trade or partnership was structured as a sale of the trading business to a company usually attracting a 10% rate of CGT by claiming Entrepreneurs’ Relief (ER) on the gain. However since 3 December 2014 the sale of goodwill to a ‘related party’ has no longer been eligible for ER (see TCGA 1992 s 169LA(4)).
Further the subsequent restriction on income tax relief for the finance costs of a buy-to-let property business introduced by FA 2015 increased the tax liability of landlords who could no longer claim income tax relief at the higher rate on mortgage interest which has been restricted to the basic rate of 20% from 6...
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Gordon W Buist (EQ Accountants) explains how the publication of Spotlight 63 on landlord tax planning schemes has exposed a fundamental flaw with incorporation relief from CGT.
For many years the incorporation of a sole trade or partnership was structured as a sale of the trading business to a company usually attracting a 10% rate of CGT by claiming Entrepreneurs’ Relief (ER) on the gain. However since 3 December 2014 the sale of goodwill to a ‘related party’ has no longer been eligible for ER (see TCGA 1992 s 169LA(4)).
Further the subsequent restriction on income tax relief for the finance costs of a buy-to-let property business introduced by FA 2015 increased the tax liability of landlords who could no longer claim income tax relief at the higher rate on mortgage interest which has been restricted to the basic rate of 20% from 6...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
