As part of ACCA’s free CPD updates, the first in the autumn series looked at inheritance tax (IHT) planning. Our accompanying factsheet explores scenarios and provides an update, starting with the key question: who is vulnerable?
The factsheet highlights that, unlike income tax – where planning could be a fairly continuous process – or capital gains tax (CGT) – where planning would ideally take place before a disposal is contemplated – IHT is something that individuals prefer not to think about:
‘It is not the elderly – true, the older they are, the more likely it becomes that they will die and so trigger a liability, but normally they do not pay it – it is their beneficiaries who will bear the burden of liability.
‘The most vulnerable group is actually the young – especially if living together (more and more people cohabit outside of marriage or civil partnership) and even more so if they have children.
‘When you add in the statistic that most will die intestate, it becomes clear that this group, should a liability arise, will be in a potentially impossible situation.’
Listen to and read more from lecturer Paul Soper FCCA.
ACCA makes ongoing consultation responses on your behalf. Two that members contributed to and may wish to read are Call for evidence: raising standards in the tax advice market and HMRC Charter.
A current call for evidence that many members will wish to contribute to is the OTS Capital Gains Tax review call for evidence and survey, which closes on 9 November. It offers the opportunity to feed through which aspects of capital gains tax are particularly complex and hard to get right, and provides suggestions for improvements.
See other government consultations.
Reverse charge – construction
It has been highlighted in Revenue and Customs Brief 7 (2020) that the reverse charge requirement will now come into force on 1 March 2021.
Businesses need to adapt their accounting systems for dealing with VAT. This will have a negative impact on the cashflows for many affected businesses, as they will no longer get VAT payments from customers for services where the reverse charge applies.
The brief also highlights that an ‘additional amendment to require end users and intermediary suppliers to notify their sub-contractors of their end user or intermediary supplier status in writing is designed to make sure both parties are clear whether the supply is excluded from the reverse charge.
‘It reflects recommended advice published in HMRC guidance and brings certainty for sub-contractors as to the correct treatment for their supplies.
If followed, it will remove a concern that HMRC may seek to challenge the reverse charge treatment where a business that qualified as an end user or intermediary supplier had not given any notification of their status.’
See the latest reverse charge guidance.