Clive Owen LLP Tax News
March 2020

Welcome to our tax news delivering tax updates for businesses, entrepreneurs and private clients.

Our tax team is constantly advising individuals and companies on a variety of tax matters including inheritance tax planning, company re-organisations and disposals as well as minimising tax across the family.

Another tax relief that may be further restricted or even abolished is CGT entrepreneurs’ relief.  This relief allows business owners to pay just 10% CGT on the first £10 million of capital gains when they dispose of their business. The rules were last tightened up in the Autumn 2018 Budget. 

When first introduced, the relief only applied to the first £1 million of gains but the limit has been increased three times since 2008 to the current lifetime limit of £10 million so the relief may be reduced this time around.

The employment allowance was introduced in April 2014 and allowed employers to claim a reduction against their national insurance bill.

Annual Tax on Enveloped Dwellings (“ATED”) has a mandatory filing requirement even if no ATED charge arises due to one of the reliefs being available.

It will be nearly 18 months since the last Budget and in the meantime we will have had three different chancellors following the unexpected resignation of chancellor Sajid Javid.

We are expecting major changes to inheritance tax (IHT) in the March Budget following two reviews by the Office of Tax Simplification (OTS) and also a report by an All-Party Parliamentary Committee.

There are frequent rumors that pension tax relief will change in the Budget. This is even more likely this year as the new Government looks for additional tax revenue to fund its ambitious spending pledges such as the HS2 rail link.

If you are looking for tax efficient investment opportunities, have you considered the Enterprise Investment Scheme (EIS)?

Your business year-end, not 5 April, is relevant for capital allowances purposes. If however you are running a business and making up accounts to 31 March or 5 April you should consider buying plant and machinery to take advantage of the £1 million Annual Investment Allowance (AIA).

For every £2 that your adjusted net income exceeds £100,000 the £12,500 personal allowance is reduced by £1.

Have you used your 2019/20 £12,000 annual capital gains exemption? Consider selling shares where the gain is less than £12,000 before 6 April 2020.