The following Owner-Managed Businesses guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
These are our brief notes and thoughts on cases published in the last week or so which caught our eye and are likely to be of particular interest to tax practitioners. Full case reports and commentary on most of these cases will be included within our normal reference sources in the coming weeks.
This is an object lesson in what can happen when the witness evidence does not support the facts. The context here is the sale of land associated with a large historic house in the Midlands. The taxpayer, who was married to a property developer with a history of bankruptcy, purchased the estate when it was in a very run-down state. She did renovate the main house itself and moved in with her husband. However, even before the purchase had been completed, plans were put in place to develop part of the land for housing ― indeed the economics of the project only made sense if this was done. She filed her return on the basis that the sale of the plots of land was exempt from capital gains tax as they were part of her principal private residence. HMRC disagreed and raised assessments on two bases ― first that the disposals of the plots were trading transactions and, in the alternative, that if they were subject to CGT, no private residence relief was available.
The Tribunal took a forensic approach to establish the facts and was not helped by the fact that Mr Whyte, who was clearly the main driver behind the development, chose not to give evidence. Mrs Whyte’s explanations of what had happened were comprehensively rejected by the judge. There has been no instance in the recent case in which a taxpayer’s evidence has been so comprehensively ‘trashed’ (there is no other word for it). Paragraphs 320 onward must have been very painful for her to read: so many of them
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Legislative definition of plant and machineryThe general rule allowing capital allowances on plant and machinery is given at CAA 2001, s 11. There is no statutory definition of the term ‘plant and machinery’ but there is confirmation in the legislation on what constitutes a building or a structure
What is structures and buildings allowance (SBA)?From 29 October 2018, expenditure on constructing a non-residential building or structure, or in certain cases, expenditure on acquiring such a building or structure, qualifies for an SBA. The following note has been updated for the changes announced
Duty to prepare trust accountsUnder the laws of England and Wales, trustees have a duty to account to the beneficiaries for their financial administration of the trust fund. This duty is established by a substantial body of case law. In the case of Armitage v Nurse, Millett LJ stated:“Every
Special rate poolExpenditure on some types of plant or machinery must, if neither annual investment allowance (AIA) nor first year allowances (FYAs) are available, be allocated to a ‘special rate pool’. Expenditure to be allocated to the special rate pool consists of expenditure incurred