Inheritance tax is possibly the least popular of the main taxes. However, in most cases, no IHT is payable on transfers made to a spouse or civil partner – regardless of whether this takes place during the lifetime of the person making the gift, or via the will following death.

However, this exemption is restricted if the person receiving the gift is not UK-domiciled. There is good reason for this. Non-domiciled individuals are not subject to UK IHT on their worldwide estate, instead it only the value of UK-situs…

Penalty reprieve ends and interest rate hike

Any taxpayer that was relying on the relaxation of the late payment penalty rules must have either paid their tax bill or agreed a time to pay arrangement before 1 April. Unless there is a reasonable excuse, a 5% penalty will shortly be levied.

Additionally, from 5 April the penalty interest rate on late payments of tax will increase to 3.25%, following the latest rise in the Bank of England base rate. This applies even where a payment arrangement is agreed.

The official rate…

Generally, the time limit for amending a tax return is one year from the due date. But sometimes, it transpires that the tax calculation is excessive later on. For example, the individual may have mistakenly over declared income. Where the deadline for amending the tax return has passed, the return cannot be amended. However, it may be possible to claim overpayment relief so that the individual isn’t penalised financially.

Overpayment relief cannot be claimed in situations where a person has made a choice between tax treatments that, in hindsight,…

IR35

TV presenter Adrian Chiles has cleared the first hurdle in his battle against HMRC’s insistence that his working arrangements with ITV and the BBC amounted to an employer-employee relationship in all but name. The First-tier Tribunal ruled that, considering all factors, Mr Chiles was clearly building a business via his company (Basic Broadcasting Ltd). It then considered whether the activities with the two broadcasters would lead to a conclusion that Mr Chiles was carrying on a business in his own right in the absence of the company. It…

Employee loans are an area where businesses often get confused. The first thing many owners will think of is the temporary corporation tax charge under s. 455. However, that only applies if the loanee is a participator of a close company. It doesn’t apply to regular employees – even directors – unless they also own/control at least 5% of the company’s share capital.

However, that isn’t the end of the tax issues. Employee loans can be a taxable benefit in kind (BIK) that need reporting on form…