Some tax enquiry cases…

Tax Investigation

Tax Enquiry Investigation

Client A had been in a 4 year running battle with HMRC.The client was keen to finalise matters but at a reasonable compromise based on the facts and circumstances. HMRC were asking for approximately £200,000 and the previous accountant and insurers were not able to reduce this figure.

Shipleys were then appointed at this late stage and discovered flaws in HMRC’s argument. We supplied irrefutable evidence and successfully negotiated tax down to £30,000.

Comment: This is unfortunately a typical case where HMRC officers tend to hastily take a defensive position and refuse to move. Our legal backgrounds are invaluable in dealing with these type of enquiries.

Serious Tax Fraud

Client B had a 15 year back duty case, the tax assessed was approximately £300,000. Shipleys managed this stressful process from start to finish and achieved a good result both on time and reduced overall duty payable and secured a sensible time to pay plan.

Comment: HMRC are much more aggressive now with collecting tax with these kind of formal tax cases on the increase; it is thus essential that the client has proper representation by experienced advisers in order to achieve the desired outcome.

Latest news & blogs…

Claiming Child Benefit could mean you get more State Pension?

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If your child is under 12 and you’re not working or don’t earn enough to pay National Insurance contributions, Child Benefit can help you qualify for National Insurance credits.These credits count towards your State Pension. They protect it by making sure you don’t have gaps in your National Insurance record.

Retirement may be the last thing on your mind when you’re looking after a new baby, but what you do now could have a big impact on your future finances.

Despite what you might think, no one automatically gets the full amount of State Pension when they retire. You’ll only get the full amount if you’ve paid, or been credited with, National Insurance contributions for 35 years.

The key word here is ‘credited’. Even if you’re not working while looking after your baby, you’ll get National Insurance credits when you claim Child Benefit until your youngest child is 12. The credits are automatically added to your National Insurance account when you claim Child Benefit, so you don’t need to do anything.

For more information please contact us on 0114 275 6292 or info@shipleystax.com.

Finance Bill 2016 receives Royal Assent

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The Finance Bill 2016 finally received Royal Assent on 15 September, enacting proposals announced in the 2016 Budget, Autumn Statement 2015 and Summer Budget 2015. Amongst other things, Finance Act 2016 includes provisions relating to income tax rates and allowances; restrictions on tax reliefs for travel and subsistence expenses (in effect since April 2016), the reduction of the lifetime allowance on pension contributions from £1.25m to £1m (again, effective from 6 April 2016); and the reduction in the main rate of corporation tax to 17% for financial year 2020.

The Act is based on George Osbourne’s final Budget. The annual Finance Bill usually receives Royal Assent in early to mid-July. This year’s extensive delay has been largely blamed on the Brexit referendum followed by the summer parliamentary recess.

The Finance Act 2016 can be found online here or alternatively you contact us for more information.

Further inheritance tax rule changes on Non-Doms

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HMRC has published further details of its proposals to amend the inheritance tax rules for non-domiciled individuals.

The changes were initially announced at the 2015 Summer Budget which were aimed at preventing non-doms from escaping a UK inheritance tax (IHT) charge on UK residential property through use of an offshore structure, and thereby bringing to an end the permanent non-dom status for tax purposes.

The consultation document suggests that individuals who are non-domiciled in the UK currently enjoy a significant advantage over other individuals for IHT purposes. UK-domiciled individuals are liable to IHT on their worldwide property, whereas non-doms are only liable on property that is situated in the UK.

Any residential property in the UK owned by a non-dom directly is within the charge of the IHT. However, a common loophole is for such individuals to hold UK residential properties through an overseas company or similar vehicle. In such a case, the property of the individual consists of overseas shares which will be situated outside the UK and are thus excluded from IHT.

In an effort to curb such structures HMRC plans to bring residential properties in the UK within the charge to IHT where they are held within an overseas structure. This charge will apply both to individuals who are domiciled outside the UK and to trusts with settlors or beneficiaries who are non-domiciled. The changes will come into effect from 6 April 2017.

Shares in offshore close companies and similar entities will no longer be deemed excluded property if, and to the extent that, the value of any interest in the entity is derived, directly or indirectly, from residential property in the UK. Where a non-dom is a member of an overseas partnership that holds a residential property in the UK, such properties will no longer be treated as excluded property for IHT purposes.

The consultation will close on October 20. The effect of these proposals will mean structures set up to mitigate IHT will now need to be reviewed in light of the above and specialist tax advice sought.

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