Connected persons

I have found a really useful page on the site that displays a fairly comprehensive list of “connected persons” definitions. I have reproduced in full below. The relevant page is here.

Appendix 19: connected persons – rules and definitions for taxation purposes

The Valuation Office Agency’s (VOA) technical manual used to assess Capital Gains and other taxes.

The rules governing whether persons are “connected” are to be found in:

s.839 Income and Corporation Taxes Act 1988

s.286 Taxation of Chargeable Gains Tax Act 1992

s.270 Inheritance Tax Act 1984

1) Individuals are connected with their:

spouse )

brother and sister )

ancestors )

lineal descendants ) and their spouses

spouse’s brother and sister )

spouse’s ancestors )

spouses lineal descendants )

2) For Inheritance Tax only, the above (para 1) is extended to include the individual’s:

uncle/aunt )

nephew/niece ) and their spouse

spouse’s uncle/aunt )

spouse’s nephew and niece)

3) A trustee of a settlement is, in that capacity, connected with:

a. the settler;

b. anyone who is connected with the settler and falls into the category listed in (1);

c. any (resident or non-resident) close company if the trustee is participator therein.

4) For Inheritance Tax only the above (para 3) is extended to include:

Anyone who is connected with the settler as in (2) above.

5) Except in relation to acquisitions and disposals of partnership assets pursuant to bona fida commercial arrangements an individual who is a partner is connected with:

  • his/her partner;
  • Any person connected with his/her partner within (1) above.

6) For Inheritance Tax only the above (5) is extended to include:

  • Anyone who is connected with the partner as in (2) above.

7) Individuals are connected with a company if:

  • they have control; or
  • they and connected persons have control.

8) In relation to a company an individual is connected with:

  • any company or individual with whom they act to secure control or exercise control over that company;
  • any company or individual who acts on their instructions in securing or exercising control of that company.

Note: Directors of a company are not necessarily connected persons in relation to transactions amongst themselves unless they are relative (see 1) or partners (see 5).

9) A company is connected with another company if:

  • the same person has control of both. Persons who are connected will each have control of both companies.
  • it controls another company where a group of two or more persons* have control of both (*they need not be connected).

Note: ‘Control’ is defined in s.226 and 416 of Income and Corporation Taxes Act 1988.

MTDfB Video now available

I have now produced a client information video regarding the current state of play of the MTDfB changes announced late last month.

The video has a professionally recorded sound track, animated text and graphics, and provides a short but clear explanation of the revised roll-out from April 2019.

Feedback has been encouraging. I really do think that video, on a non-technical level, is the best format for communicating information on your website. Take a look:

Back copies of my tax and other client information videos can now be viewed, and back copies ordered here.

PI cover for GDPR

I have been in discussion with Locktons recently, they are the PI insurers recommended by the ACCA, about the impact of GDPR claims: will they be covered by PI insurers?

The present opinion, is that if a claim is brought against a firm by a third party for failure to look after or handle their data, the PI policy should respond assuming the claim arises in consequence of the provision of professional business by the Insured.

The penalties for breaching the GDPR when it kicks in May 2018, are severe. Which prompts two further questions:

  1. What if the breach is a consequence of negligence, of ignoring the new regulations, and
  2. If PI does pick up the claim, what impact will this have in the longer term for PI premiums?

I am presently researching a support pack for UK practitioners, that sets out the systems you will need to have in place before next year. My studies thus far have convinced me that this is no lightweight change in legislation. Practitioners will need to take the changes seriously. I should have the support pack available from 1 September 2017.

HMRC offering advice!

Tax practitioners will be alarmed to hear that HMRC have set up a new online tax forum. Their press release says:

A new online tax forum and dedicated webchat service for small businesses and the self-employed has been launched today (1 August 2017) by HMRC.

The Small Business Online Forum is a quick and easy way for small businesses to get answers to their tax questions, as well as help with:

  • starting a business
  • support for growing a business – including taking on employees and expanding
  • buying and selling abroad
  • completing tax returns
  • tax credits

Click to access the Small Business Online Forum

Linked to the forum, HMRC’s new dedicated webchat service offers direct support to businesses and the self-employed.

Additional information provided includes:

  1. The Small Business Online Forum forms part of the government’s business tax roadmap announced at Budget 2016.
  2. A pilot was launched in March 2017 and since then the forum has grown to have more than 1,000 registered users.
  3. The forum does not deal with questions about taxpayers’ individual circumstances. Any comments which include personal information will be deleted.
  4. While no personal or case-specific information is posted on the forum, customers may be offered help through HMRC’s webchat service and their personal case handled by an adviser.
  5. Follow HMRC Press Office on Twitter.
  6. HMRC’s Flickr channel can be found here

Be interesting to see if this facility is used to confirm a course of action with HMRC without using convoluted clearance procedures.