The Importance of getting ‘It’ Right
Date Published
Recent Tax Cases reinforce the message : Get Advice : Get It Right : Document It.
The case of D. George shows the common promise of “you will be looked after on a third party sale” can fall foul of horrid tax consequences if there is no advance advice and documentation.
On a separate, and totally different technical argument, a taxpayer and spouse undertook (for presentational purposes) a development project through an associated company, which they owned jointly. Circumstances, with a crash in the development value, made their ideas change. In the end, the company was wound up without repaying the director’s loan which funded the development work. As a result, the owners were not deemed to have incurred the crucial enhancement expenditure on the development, and so obtained no tax relief on £250,000 paid out.
Painful lessons on both counts.
1. Get Advice 2. Get It Right 3. Document It.
If in doubt, repeat step one!