Eaves and Co February 2013 Newsletter

 

HMRC wins landmark Inheritance Tax Case on Appeal

 

Pawson CaseInitially in the case CRC v Personal Representatives of N Pawson the First-tier Tribunal ruled that as long as additional services were provided in conjunction with a holiday let then the holiday lets would qualify for business property relief (BPR) and therefore obtain relief from Inheritance Tax (IHT) at 100%.

However upon appeal, the Upper-tier Tribunal decided that the services provided to clients, such as cleaning, providing a welcome pack, and being on call to deal with queries and problems, were unlikely to be significant or sufficient to stop the business from being “mainly one of property investment”.

As a result BPR was disallowed and the letting operation fully charged to IHT.

For a more detailed synopsis of this case please visit our blog.

 

Traveling Expenses for Doctors Denied – Dr Samadian v HMRC

 

A recent test case was heard by the tax tribunal regarding whether certain traveling expenses were allowable, in terms of the interpretation of the “wholly and exclusively” rules.

Dr Samadian worked full time as an employee for the NHS at two hospitals in London and had a permanent NHS office.  He also worked at two private hospitals holding weekly out-patient sessions.

The Tribunal did not accept that Dr Samadian’s home office could be treated as the start for calculating his allowable private practice business mileage for habitual journeys.

The decision could potentially have an impact on all self-employed professions in cases where there is a home office and another business base from which they operate on a regular basis.

For me details on this case please click here.