Pinksalt Partners’ Post

The usual tax position for couples who live together with their spouse or civil partners is that property income held in joint names is divided 50:50. This is regardless of the actual ownership structure. However, where there is unequal ownership and the couple want the income taxed on that basis a notification must be sent to HMRC together with proof that the beneficial interests in the property are unequal. This is done using Form 17 - Declare beneficial interests in joint property and income. #BeneficialInterest #JointProperty

The usual tax position for couples who live together with their spouse or civil partners is that property income held in joint names is divided 50:50. This is regardless of the actual ownership structure. However, where there is unequal ownership and the couple want the income taxed on that basis a notification must be sent to HMRC together with proof that the beneficial interests in the property are unequal. This is done using Form 17 - Declare beneficial interests in joint property and income. #BeneficialInterest #JointProperty

When filing a 𝐅𝐨𝐫𝐦 𝟏𝟎𝟔𝟓 for a 𝐩𝐚𝐫𝐭𝐧𝐞𝐫𝐬𝐡𝐢𝐩, you might have come across a situation where 𝐛𝐨𝐭𝐡 𝐩𝐚𝐫𝐭𝐧𝐞𝐫𝐬 𝐚𝐫𝐞 "𝐩𝐚𝐫𝐭𝐧𝐞𝐫𝐬𝐡𝐢𝐩 𝐟𝐢𝐫𝐦𝐬". What happens if 𝐨𝐧𝐞 of the 𝐩𝐚𝐫𝐭𝐧𝐞𝐫𝐬𝐡𝐢𝐩 𝐟𝐢𝐫𝐦𝐬 𝐥𝐞𝐚𝐯𝐞𝐬? The entity would be considered a 𝐝𝐢𝐬𝐫𝐞𝐠𝐚𝐫𝐝𝐞𝐝 𝐞𝐧𝐭𝐢𝐭𝐲. Now the question is how to 𝐫𝐞𝐩𝐨𝐫𝐭 profits and losses. Let’s break it down. Imagine a 𝐩𝐚𝐫𝐭𝐧𝐞𝐫𝐬𝐡𝐢𝐩 called 𝐀𝐁𝐂𝐃 𝐋𝐋𝐂, where the partners are 𝐀𝐁 𝐋𝐋𝐂 and 𝐂𝐃 𝐋𝐋𝐂 both 𝐩𝐚𝐫𝐭𝐧𝐞𝐫𝐬𝐡𝐢𝐩 𝐟𝐢𝐫𝐦, each holding 50%. On June 30th, 𝐂𝐃 𝐋𝐋𝐂 decides to 𝐩𝐚𝐫𝐭 𝐚𝐰𝐚𝐲, and 𝐀𝐁 𝐋𝐋𝐂 𝐜𝐨𝐧𝐭𝐢𝐧𝐮𝐞𝐬 𝐫𝐮𝐧𝐧𝐢𝐧𝐠 𝐀𝐁𝐂𝐃 𝐋𝐋𝐂 𝐚𝐥𝐨𝐧𝐞. Since AB LLC is now the only owner, the IRS considers 𝐀𝐁𝐂𝐃 𝐋𝐋𝐂 a 𝐝𝐢𝐬𝐫𝐞𝐠𝐚𝐫𝐝𝐞𝐝 𝐞𝐧𝐭𝐢𝐭𝐲 starting from July 1st. In cases where partners are 𝐢𝐧𝐝𝐢𝐯𝐢𝐝𝐮𝐚𝐥𝐬, and only one is left, the remaining partner 𝐫𝐞𝐩𝐨𝐫𝐭𝐬 all 𝐩𝐫𝐨𝐟𝐢𝐭𝐬 𝐚𝐧𝐝 𝐥𝐨𝐬𝐬𝐞𝐬 on their 𝐢𝐧𝐝𝐢𝐯𝐢𝐝𝐮𝐚𝐥 𝐭𝐚𝐱 𝐫𝐞𝐭𝐮𝐫𝐧 (Form 1040). But what if 𝐛𝐨𝐭𝐡 𝐩𝐚𝐫𝐭𝐧𝐞𝐫𝐬 𝐚𝐫𝐞 𝐩𝐚𝐫𝐭𝐧𝐞𝐫𝐬𝐡𝐢𝐩𝐬, and one leaves? In this example, from July 1st, 𝐀𝐁𝐂𝐃 𝐋𝐋𝐂 is now considered a 𝐝𝐢𝐬𝐫𝐞𝐠𝐚𝐫𝐝𝐞𝐝 𝐞𝐧𝐭𝐢𝐭𝐲, and 𝐚𝐥𝐥 𝐢𝐭𝐬 𝐩𝐫𝐨𝐟𝐢𝐭𝐬 𝐚𝐧𝐝 𝐥𝐨𝐬𝐬𝐞𝐬 𝐰𝐢𝐥𝐥 𝐛𝐞 𝐜𝐨𝐦𝐛𝐢𝐧𝐞𝐝 𝐰𝐢𝐭𝐡 𝐀𝐁 𝐋𝐋𝐂’𝐬 𝐭𝐚𝐱 𝐫𝐞𝐭𝐮𝐫𝐧 (𝐅𝐨𝐫𝐦 𝟏𝟎𝟔𝟓). This means ABCD LLC will no longer need to file its own 1065 return from next year. Until June 30th form 1065 will be filled for ABCD LL and from July 1st profits and loss will be 𝐜𝐨𝐧𝐬𝐨𝐥𝐢𝐝𝐚𝐭𝐞𝐝 with 𝐀𝐁 𝐋𝐋𝐂’𝐬 𝐫𝐞𝐭𝐮𝐫𝐧. I have seen this situation many times, and it is important to note that in such cases, no future 1065 returns are filed for the disregarded entity. I have seen preparers making a mistake in this scenario repeatedly. #cpa #cpafirms #irs #learning #taxseason #partnership #ustax #ustaxation

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A Post Transaction Valuation Check (PTVC) can be requested from HMRC for an individual to work out a capital gains tax liability or for companies to calculate corporation tax liability on chargeable gains. The request for a PTVC should be made using the CG34 form. HMRC’s guidance says the form must be completed and sent to the address on the form at least three months before the relevant tax return filing date. #HMRCValuations #Tax

Thank you to Laura Brunnen for the attached article. The heading "The Perils of Bypassing Expertise" says it all. Every general practitioner in every field should read this. Being a general practitioner is a super-power. Don't diminish it by pretending to be an expert too. The road to Lloyds of London is littered with people who got the balance wrong. At Galloways Accounting, we have general practitioners and we have experts - working together to benefit our clients #dreamteam. https://lnkd.in/ed3QvS6D

A Post Transaction Valuation Check (PTVC) can be requested from HMRC for an individual to work out a capital gains tax liability or for companies to calculate corporation tax liability on chargeable gains. The request for a PTVC should be made using the CG34 form. HMRC’s guidance says the form must be completed and sent to the address on the form at least three months before the relevant tax return filing date. #HMRCValuations #Tax

Another fantastic session at Accountex Manchester yesterday with Suzanne Clements (Ad Valorem Group) giving her thoughts on the current R&D tax enquiry regime as an ex-HMRC inspector 🤔 Insights also from Nigel Adams (Ad Valorem Group ), Emma Rawson (The Association of Taxation Technicians) and Glenn Collins (ACCA United Kingdom) on how to navigate the choppy waters if you are facing a compliance check or full enquiry into an R&D claim ♟️ The overriding theme was that the R&D incentives are an important driver for growth in the UK. Despite the adversarial approach taken by HMRC at present, collaboration between agents, accountants, tax advisers and regulatory bodies is incredibly important to deliver the best results for our customers and the UK economy as a whole 🤝🇬🇧 We hope Rt Hon Rachel Reeves is listening given that stats show 89% of business owners feel HMRC interactions are causing a negative impact on their business compared to 49% last year 😱 If you didn’t get a chance to make it to the session, contact us for key takeaways 📝 https://lnkd.in/e4FA_Ffy #ASM24 #Randdtax #ACCA #ATT #CIOT

❌The case of Cooke v HMRC: the problems caused by a rounding error: 🧮Tax Adviser Magazine consider a case involving a shareholder who claimed entrepreneurs’ relief when he owned 4.99998% of a company’s shares. Does the First-tier Tribunal have the authority to rectify a rounding error? 📘Read more @taxadvisermagazine:

There are special rules concerning the liability to IHT of a transfer made during one’s lifetime. For example, most gifts made during a person's life are not subject to tax at the time of the gift. These lifetime transfers are known as 'potentially exempt transfers' or 'PETs'. #IHT #TaxGifts