The Liechtenstein Government and HM Revenue and Customs have recently issued a second joint declaration in relation to the Liechtenstein Disclosure Facility (LDF).
In order to qualify for the terms of the LDF, it is not necessary for assets to have been held in Liechtenstein historically. Instead a taxpayer could invest in relevant Liechtenstein property now so as to be able to utilise the favourable terms of the LDF for undisclosed UK tax liabilities in past years.
The original memorandum of understanding merely noted that relevant property must be part of a meaningful relationship, however the second joint declaration expands on this to say that any new relevant property must not only be meaningful but also of sufficient value and permanence to reflect the spirit of the LDF.
It is unclear at this point as to what level of investment is likely to be considered as ‘sufficient value’, however further clarification is to be provided by HM Revenue and Customs in due course.
An Employer Financed Retirement Benefit Schemes (EFRBS) is a pension scheme that is unqualified.
Contributions into EFRBS are tax neutral, between employer and employee.
In recent times they have become increasingly popular with footballers and bank staff. They are routinely offered as part of contract negotiations. The trusts’ funds can be used to buy assets such as property and can for example, be very attractive to foreign players who intend to leave the UK when they finish their football careers.
An EFRBS can be used as part of a tax strategy for owner managed businesses also. However, the Treasury and HMRC has announced that they intend to shut the opportunity, and limit contributions to EFRBS to the same level of contributions that will be permitted to qualifying pension schemes.
For alternative tax planning methods or to talk about EFRBS why not give our Leeds office a call?
In dealing with a recent project in Leeds, we came across one of the many quirks of the tax system regarding Capital Allowances.
Certain capital expenditure is deemed to be an ‘Integral Feature’ which receives writing-down allowances at a low rate. Such items include electrical systems, lighting systems and cold water systems.
Key here is that when an ‘integral feature’ is repaired, in certain situations, the cost may be treated as capital rather than as revenue thus causing a problem as relief is deferred.
In general, this rule will apply where the expenditure is more than 50% of the cost of replacing the whole asset, however tax advice should be taken on a specific case by case basis, to understand if the problem can be avoided.
Eaves & Co are proud to announce that HM Revenue & Customs have agreed our offer for settlement under the LDF for our first client project under the facility.
The offer was made using the marginal rate of tax route and was agreed by HMRC with only some minor amendments required. We are pleased to report that HMRC did not raise any in-depth questions into our client’s tax affairs as a result of the disclosure.
The smooth passage of the LDF process in this case is largely down to the hard and detailed work put in by our professional team in preparing the calculations in a robust and timely manner. This is an exceptional result, especially given the complexity of the client’s offshore banking and investment affairs.
We are now working hard on our 2nd and 3rd client projects, with the objective being a similar successful outcome for their Liechtenstein Disclosure Facility disclosures.
Eaves & Co, Specialist Tax Advisors are excited to have joined the Sharemark Advisers Network.
Sharemark is an alternative trading platform that offers innovative and flexible trading mechanisms to companies, their investors and employees.
Eaves & Co, Specialist Tax Advisors are experienced in providing both tax and share valuation advice to SME’s and their owners. We believe that our tax and share valuation background will allow us to advise both new and existing Sharemark clients on a range of tax matters including; company reorganisations, employee share schemes, management buyouts, entrepreneur’s relief and other taxation aspects of share sales.
For more information on Sharemark, please see their website http://www.sharemark.com/