Category Archives: Capital Gains Tax

Whilst not mentioned in the Chancellor’s statement, the Budget documents reveal the Government’s intention to bring offshore residents within the scope of UK tax on gains on commercial property from April 2019.  UK tax will also be extended to indirect disposals of both commercial and residential property, and the existing exemption from the charge on … Continue reading Non-residents to be taxed on commercial property gains

The UK’s Substantial Shareholdings Exemption (“SSE”) will be extended from April 2017. The main beneficiaries will be investment companies selling shareholdings of 10% or more in trading companies and companies owned by institutional investors which are themselves exempt from UK tax on capital gains The SSE was introduced in 2002 to permit trading groups to … Continue reading Substantial Shareholdings Exemption to be extended

As a result of conflicting decisions in two recent tax cases, there is uncertainty as to the impact of deferred shares (and other shares with no dividend rights) on shareholder tax reliefs, in particular entrepreneurs’ relief for individuals and group reliefs for corporate shareholders. The issue is whether these shares are “ordinary share capital” for tax … Continue reading Deferred shares: impact on entrepreneurs’ relief and group relief

Today’s Budget continued the recent trend of announcing changes to the ER regime. However, unlike previous Budgets, today’s changes generally expand the situations in which ER will be available. The main change is the extension of ER to shares held by individuals who are external investors rather than employees or directors. The Budget materials also … Continue reading Entrepreneurs’ relief – not just for entrepreneurs

In a surprise move in today’s Budget, the Chancellor has slashed the rate of capital gains tax from 28% to 20% (or, for basic rate taxpayers, from 18% to 10%).  These changes come into effect from 6 April 2016.  This will be great news for any employee holding shares in their employer company and, in … Continue reading Employee Share Incentives: a sprinkling of sugar but a cap on ESS

In addition to the changes to the capital gains tax treatment of private equity carried interest announced today, HMRC has published a Consultation Document which appears to be targeted mainly at hedge fund managers. It aims to ensure that individuals who manage funds where the underlying activities are more closely aligned  to trading than investing  pay full … Continue reading Hedge fund managers’ performance incentives: consultation launched

Gains arising on or after today via carried interest are subject to new computational rules. Essentially, an affected individual will be taxed by reference to the full amount received less any sums actually invested by that individual. Whilst a capital gains treatment is preserved, it is intended that gains will be calculated in line with … Continue reading Carried interest – raising the effective rate of capital gains tax

Universities will often set up spin-out companies to commercialise the intellectual property generated by their academic research projects.  Spin-out companies are particularly common in the life sciences and technology sectors.  University academics and researchers who have assisted with the development of the intellectual property will frequently receive shares in the spin-out company as a reward … Continue reading Spinning-out entrepreneurs’ relief

One of the areas of difficulty identified by the Office of Tax Simplification in its interim report is how to apply the entrepreneurs’ relief (“ER”) rules to partnerships.  Unfortunately, the commentary within the interim report itself is not particularly clear as to the precise nature of the problems, so what follows is my list. LLP … Continue reading OTS Review of partnerships: Some thoughts about entrepreneurs’ relief

It is proposed that non-UK residents should be brought within the charge to tax on capital gains in relation to UK situate residential property. This is proposed to be implemented from April 2015 in relation to “future gains”. A consultation will be published early in 2014 so at the moment we have few details. It is not clear … Continue reading Non UK residents investing in UK residential property