Loan interest relief – Loans to buy an interest in a close company

Securing tax relief for loan interest paid can be difficult. For example, the borrowings must be structured properly, and certain statutory conditions must be satisfied. Separate provisions apply for individuals and companies; this article is concerned with loan interest relief for individuals. The legislation concerning interest payments (ITA 2007, Pt 8, Ch 1) provides for tax relief in respect of loan …

HMRC enquiries – The importance of taking notes at meetings

An important aspect of HM Revenue and Customs (HMRC) enquiries into tax returns that is sometimes underestimated is meetings between taxpayers (and their agents) and HMRC officers, and the notes taken at meetings. The taxpayer’s responses to the HMRC officer’s questions often set the course and tone for the whole enquiry. Traditionally, the HMRC officer provides notes of the meeting …

Settlor-interested trusts – Another ‘downside’ for settlors.

There are various,  potentially adverse, tax implications where an individual settles cash or other assets on trust but is capable of benefitting from the trust. Various anti-avoidance rules exist for income tax, capital gains tax and inheritance tax purposes, which can give rise to unforeseen tax problems for the unwary. For example: • The ‘settlements’ provisions treat trust income as …