Tax update - July 2019

In this month’s update we report on HMRC’s updated guidance on the meaning of “ordinary share capital”, the Law Society’s response to HMRC’s off-payroll working rules consultation and changes to the principal private residence ancillary reliefs.

We also comment on three recent cases relating to the period for which a taxpayer is entitled to claim share loss relief discovery assessments and deliberate inaccuracies in returns; and the application of the SDLT anti-avoidance rule in section 75A, Finance Act 2003.

News items

HMRC publishes updated guidance on the meaning of “ordinary share capital”

On 21 May 2019, HMRC updated its guidance on the meaning of “ordinary share capital” in section 1119, Corporation Tax Act 2010, and section 989, Income Tax Act 2007, to reflect the coming into force of Companies Act 2006. Read more.

Law Society publishes its response to HMRC’s consultation on off-payroll working rules

On 3 June 2019, the Law Society published its response to HMRC’s consultation on the proposed extension, from April 2020, of the off-payroll tax rules (used to determine how employment taxes apply to individuals who provide services through an intermediary) to the private sector. Read more.

Changes to the principal private residence ancillary reliefs

On 1 April 2019, HMRC launched a consultation entitled “Private Residence Relief: Changes to the Ancillary Reliefs”. Read more.

Case reports

Derry – Supreme Court confirms HMRC’s challenge to share loss relief claim flawed

In R (on the application of Derry) v HMRC [2019] UKSC 19, the Supreme Court has held that the taxpayer was entitled to claim share loss relief in the year in which the loss was incurred, rather than the following year. Read more.

Tooth – Court of Appeal confirms discovery assessment was invalid

In HMRC v Tooth [2019] EWCA Civ 826, the Court of Appeal has held that an assessment, issued pursuant to section 29, TMA, was invalid. Read more.

Hannover – SDLT anti-avoidance rule applied even though there was no tax avoidance motive

In Hannover v HMRC [2019] UKFTT 0262 (TC), the FTT has held that the SDLT anti-avoidance rule in section 75A, Finance Act 2003, applied to a series of transactions that included the sale of units in a Guernsey property unit trust (GPUT), even though there was no tax avoidance motive. Read more.