Tax tips newsletter for professionals

Where a business is operated as a family or personal company, the director-shareholders may need to extract the profits to use them personally outside the company. 

Sarah Bradford explains how profits can be extracted from a family company other than as a salary or dividends.

HM Revenue and Customs (HMRC) has powers to request information reasonably required to check a taxpayer’s ‘tax position’ (FA 2008, Sch 36). Here, ‘tax position’ includes any past, current or even future tax liability, penalties, claims or elections.  

Lee Sharpe warns that HMRC regularly demands records and information to which it is not entitled.

A limited company is a distinct legal entity that is separate from its owners. This means that the company itself, as a taxpayer, is responsible for its debts and liabilities, and its owners (shareholders) have limited liability, meaning their personal assets are protected beyond their investment in the company. 

Nick Davies examines the various ways that tax liabilities can be passed on to company directors in the event of a liquidation.

The sale of a commercial property is normally exempt from VAT, but the vendor has the option to tax it – in other words, they can decide to charge VAT on the sale so that they can recover the VAT on costs associated with it. 

Andrew Needham looks at some potential pitfalls of selling a property to a housing association.

Mark McLaughlin reviews two recent important tax cases:

The temporary non-residence rules are anti-avoidance provisions and are somewhat complex in nature. The rules are primarily, although not exclusively, targeted at capital gains made in the period of temporary non-residence.

Malcolm Finney outlines some of the implications of temporary non-residence. 

Where property is owned jointly with a spouse or civil partner who live together, the default position (under ITA 2007, s 836) is for the rental profits to be split equally regardless of the underlying capital ownership.

Joe Brough outlines how rental profits are split for joint owners, along with how Form 17 can be used to split rental profits between spouses and civil partners.