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Introduction to stamp taxes

Introduction to stamp taxesThere are a five UK stamp taxes which apply to transactions involving UK land and buildings, stocks and marketable securities and partnership interests. The five stamp taxes are:•stamp duty land tax (SDLT), applying to transactions in land and buildings in England and Northern Ireland •land and buildings transactions tax (LBTT), applying to transactions in land and buildings situated in Scotland•land transaction tax (LTT), applying to transactions in land and buildings situated in Wales•stamp duty applying to instruments (for example, a stock transfer form) that transfer UK shares and certain other types of stocks and securities•stamp duty reserve tax (SDRT) applying to electronic (or paperless) transfers of UK shares and certain other securitiesIn addition, there is separate property tax known as the annual tax on enveloped dwellings (ATED) which should be considered along with the SDLT (or LBTT/ LTT) consequences of the acquisition of residential property. Broadly, ATED applies to the acquisition of certain UK dwellings worth more than £500,000 by companies and other types of ‘non-natural persons’. For more information, see the Overview of the ATED regime guidance note. Each stamp tax is briefly described below, with links to separate guidance notes containing further details.SDLT, LBTT and LTTSDLT was introduced on 1 December 2003 to replace stamp duty on transactions in land and buildings. Its scope is much wider than stamp duty in that it applies to any acquisition of a

Weekly tax highlights ― 16 September 2024

Weekly tax highlights ― 16 September 2024Direct taxesMultinational Top-up Tax and Domestic Top-up Tax ― further HMRC draft guidanceHMRC has published further draft guidance on Multinational Top-up Tax and Domestic Top-up Tax. This release of the draft HMRC guidance manual includes all previously released pages (including updates in some cases) in addition to newly drafted pages.HMRC invites comments from stakeholders and publication of the manual will begin following the review of consultation responses.A supplementary release of draft guidance will follow in due course. This will include remaining draft guidance on flow-through entities, joint ventures, the insurance sector, additional top-up amounts, and the undertaxed profits rule (UTPR).The consultation closes on 23 October 2024.This guidance collection has also been updated to include a link to the consultation and a new section ‘Report Pillar 2 top-up taxes’.See Simon’s Taxes D4.302, D4.320.The Research and Development Relief (Information Requirements etc) Regulations 2024, SI 2024/950These Regulations amend the Relief for Research and Development (Content of Claim Notifications, Additional Information Requirements and Miscellaneous Amendments) Regulations 2023 (SI 2023/813) in relation to the specified information to be provided by companies in support of their claims for Research and Development (R&D) tax reliefs following significant reforms to the R&D tax regime. A valid additional information form must be submitted alongside a claim for R&D relief.They also make a small technical amendment relating to R&D claim notifications, and require notifications under Regulation 2(3)(b) of the Research and Development (Chapter 2 Relief) Regulations 2024 (SI 2024/348) (which enable certain companies to

Qualifying interest in possession trusts ― IHT treatment

Qualifying interest in possession trusts ― IHT treatmentThis guidance note details the IHT treatment of qualifying interest in possession trusts on the death of the beneficiary or on a termination in their lifetime and explains the calculation in each case, including any exemptions that are available.When a QIIP is charged to inheritance taxTrust property, which is the subject of a qualifying interest in possession (QIIP), may become chargeable to inheritance tax on the following occasions:•on the death of the beneficiary with the interest in possession•on the death of the beneficiary within seven years after a transfer or lifetime termination of his interest•on the transfer or conversion of the interest to a non-qualifying or discretionary interest during the beneficiary’s lifetime.Property in which a QIIP subsists is not relevant property so it is not subject to principal (10-year) and exit charges during the life of the trust. See the Relevant property guidance note, and other notes in the ‘relevant property’ sub-topic for details of the relevant property tax regime.Death of the beneficiary with the qualifying interest in possessionWhen the beneficiary with the QIIP dies, the trust property will be valued and counted as part of the deceased’s estate, and inheritance tax will be charged on that property (in addition to any other property that is in their estate). In valuing the trust property, the related property rules will apply. See the Valuation of property guidance note. Once the inheritance tax charge has been calculated, the trustees of the

Weekly tax highlights ― 10 February 2025

Weekly tax highlights ― 10 February 2025Direct taxesUpdated bonus rates for Save As You Earn share option schemesThe bonus rates for Save As You Earn (SAYE) share option schemes have been reduced with effect from 21 February 2025.The bonus rates for Save As You Earn (SAYE) share option schemes have been reduced with effect from 21 February 2025 following the cut in the Bank of England base rate to 4.5%. See Simon’s Taxes E4.577.SI 2025/111 The Designation of Special Tax Sites (East Midlands Investment Zone) Regulations 2025Regulations have been made to designate special tax sites in the East Midlands Investment Zone.These Regulations designate special tax sites within, or connected to, the East Midlands Investment Zone in which certain tax reliefs are available. The tax reliefs available in special tax sites in England include Stamp Duty Land Tax (SDLT) relief on qualifying acquisitions of land, a 10% enhanced rate of structures and buildings allowance, a 100% first year allowance for qualifying expenditure on plant and machinery, a zero rate of secondary Class 1 National Insurance Contributions (NICs) on earnings up to the investment zones upper secondary threshold (£25,000) for qualifying employments and business rates relief.The regulations come into force on 26 February 2025.See Simon’s Taxes B3.324GB, B3.271, E8.2104.Property taxesSI 2025/119 The Land Transaction Tax (Modification of Relief for Acquisitions Involving Multiple

Overview of the ATED regime

Overview of the ATED regimeATED ― backgroundThe annual tax on enveloped dwellings (ATED) regime was introduced by FA 2013, Part 3 and was one element of a series of anti-avoidance measures that were designed to make it less attractive to hold high-value UK residential property through a corporate structure (or ‘envelope’). The key aspects of ATED are:•the annual charge•entities ‘in charge’ but relievable and the nil return requirement to avoid penalties•ATED-related SDLT•ATED-related CGT for disposals prior to 6 April 2019The ATED regime applies to high-value UK residential property owned on, or acquired after, 1 April 2013, by:•companies•partnerships with at least one company member, or•collective investment schemes (including unit trusts)Together these are referred to in the remainder of this guidance note as ‘non-natural persons’ or ‘NNPs’. The ATED charge applies regardless of where the NNP is established or resident and therefore applies to both UK and non-UK NNPs.Those within the ATED rules are subject to an annual property tax based on the value of the property held, although certain reliefs and exemptions are available. ATED also brings with it additional filing requirements for those within the scope of the provisions, even in cases where no tax charge is actually payable.The ATED rules are complex and this guidance note outlines the main aspects of the regime only.For further detail on the ATED regime, see Simon’s Taxes B6.7 and also HMRC’s annual tax on enveloped dwellings technical guidance.When does ATED apply?Broadly, the ATED regime will

Tolley’s monthly tax case tracker

Tolley’s monthly tax case trackerThis tax tracker tool displays the current status and most recent developments of direct tax cases being heard by the Upper Tribunal (UT), the Court of Appeal, the Court of Session, the Supreme Court and the EU Court of Justice as at 21 March 2025. It is updated on a rolling monthly basis.The tracker is split into three parts:•Cases subject to an appeal•Cases potentially subject to an appeal, and•Finalised tax casesCases subject to an appealThis section of the tracker shows cases that are currently subject to an appeal.Name of parties and citationCurrent statusA D Bly Groundworks and Civil Engineering Limited v HMRCCA/2024/001410; [2024] UKUT 104 (TCC); [2021] UKFTT 445 (TC)Subject: Corporation tax ― provision for pensions liabilitiesStatus: Taxpayers’ appeal to the Court of Appeal scheduled to be heard by 19 September 2025Background: The taxpayers were lead appellants in a group of appeals by companies who implemented a tax avoidance scheme, notified under DOTAS, to reduce their profits chargeable to corporation tax. The taxpayers implemented an Unfunded Unapproved Retirement Benefit Scheme (UURBS): a contractual arrangement under which they promised to provide pensions to directors and other key employees in the future. The taxpayers set the pensions at 80% or 100% of their estimated profits before tax. The taxpayers made provisions in their accounts in respect of their liability to make pension payments in the future and claimed corresponding corporation tax deductions. The FTT found that the

A–Z of international tax terminology

A–Z of international tax terminologyList of commonly used phrases in international taxThe table below lists some of the terminology commonly used in the context of corporate international tax and transfer pricing, together with links to additional sources of information including other guidance notes, Simon’s Taxes and HMRC’s manuals.Navigation tip: press ‘Ctrl + F’ to search for a particular term within the table.TerminologyDefinitionFurther detailsAAmount A and Amount BPart of the OECD’s package of measures to be introduced under Pillar 1 ― see ‘Pillar 1’ belowAnti-conduitCertain double tax treaty provisions contain anti-conduit conditions, which deny treaty benefits where the amounts received are paid on to another company. This ensures that treaty benefits are only obtained by the contracting states, rather than residents of third countries who have deliberately arranged their transactions to obtain treaty benefits to which they would not otherwise be entitledDT19850PPArm’s length arrangementAn arm’s length arrangement reflects the price that would be payable and the terms which would be agreed for a transaction between unconnected parties. This is important for the purposes of the transfer pricing legislation (see ‘Transfer pricing’ below)Transfer pricing rules ― overview guidance note Simon’s Taxes B4.147INTM412040ATAD (anti-tax avoidance directive)ATAD is an EU directive which provides for a series of anti-abuse rules relating to interest expense deductions, controlled foreign companies and hybrid mismatches, and requires the introduction of a corporate GAAR and an exit tax (these two measures not being part of the BEPS

Weekly tax highlights ― 17 March 2025

Weekly tax highlights ― 17 March 2025Direct taxesSI 2025/330 The Statutory Maternity Pay (Compensation of Employers) (Amendment) Regulations 2025Regulations have been published to amend the amount of statutory maternity pay that small employers are entitled to recover from HMRC.These Regulations are made to amend SI 1994/1882 and SR 1994/271 to increase the additional amount that small employers are entitled to recover from HMRC from 3.0% to 8.5% of the amount of statutory maternity pay they have paid out.This increase takes effect from 6 April 2025.SI 2025/294 The Income Tax (Pay As You Earn) (Amendment) Regulations 2025These Regulations are made to amend the Income Tax (Pay As You Earn) Regulations 2003, SI 2003/2682 to insert a new definition of ‘secondary threshold’.These Regulations are made to amend SI 2003/2682 to:•amend regulation 2(1) insert a new definition of ‘secondary threshold’•• amend regulations 47(2), 48(2), 49C(2) and 49D(2) concerning new starter procedures for seconded expatriates to add reference to the secondary threshold so that an employer must apply either the lower earnings limit or the secondary threshold, whichever is the lesser amount, on the making of the first relevant payment to the employeeThey come into force on 6 April 2025.SI 2025/325 The Social Security (Contributions) (Amendment No. 3) Regulations 2025These Regulations address the NIC consequences arising from the rectification exercises carried out by the Parliamentary Contributory Pension Fund, the Members of the Senedd Pension Scheme or an Assembly Members Pension Scheme.The rectification exercises aim to remedy the age discrimination that occurred

Weekly tax highlights ― 25 November 2024

Weekly tax highlights ― 25 November 2024Direct taxesPensions (Abolition of Lifetime Allowance Charge etc) (No 3) Regulations, SI 2024/1167These Regulations make further consequential changes as a result of the abolition of the pensions lifetime allowance.These Regulations make further changes to the substantive pensions legislation (mainly FA 2004 Schedules 29 and 36) in consequence of the abolition of the lifetime allowance. The changes have effect for the 2024–25 tax year onwards.See Simon’s Taxes E7.215A.Indirect taxesPrivate school fees and VAT treatment of therapy servicesHMRC has updated its guidance on the VAT treatment of payments linked to private school fees to cover supplies of therapy services which are provided in addition to supplies of education.In an important addition to its guidance on the VAT treatment of payments linked to private school fees, HMRC has provided new notes and examples covering situations where pupils receive therapy services in addition to education. The new section ‘supplying special educational needs and disabilities (SEND) therapies and education’ notes that, where services performed by registered healthcare professionals (such as speech and language therapists or educational psychologists) are provided by a school it will be necessary to determine who is making the supply and whether the services form part of a single supply of education or are a separate supply of healthcare. The guidance confirms that ‘qualifying supplies of healthcare are exempt from VAT as long as the primary purpose of these services is the protection, maintenance, or restoration of the health of a person.’See De Voil Indirect

Overseas property businesses for companies

Overseas property businesses for companiesOverviewReal estate income is generally taxed where the property is located; the UK’s network of tax treaties generally allow the jurisdiction where the land is located to tax income from the land.Therefore, a UK company with overseas property may be subject to tax in the foreign jurisdiction as well as in the UK, as UK tax rules subject a UK company to UK corporation tax on its worldwide profits including from foreign land and property. Relief for overseas tax on property income may be available by treaty relief, unilateral relief or deduction relief, depending on the circumstances. There is unfortunately no substitute for checking the tax treaty to see if one country has unilateral taxing rights, or otherwise how its provisions may affect double tax relief. The relevant provisions to check will depend on the nature of the income, such as rental or trading. Basis of taxation of foreign property incomeWhere the business of the UK company is such that the income from property is taxed as trading income, rather than gains (eg where the company is a property developer or trades in property such as flipping), then the UK tax treaties, where applicable, may provide relief from overseas taxes under the business profits article. Where the UK company does not have a permanent establishment in the treaty country, the UK will generally have taxing rights over business profits over the UK company, including the profits of a property business.Where the UK company is a