Tax update May 2018

In this month’s update we report on HMRC’s recently published guidance relating DOTAS for inheritance tax, its guidance for the GAAR and a new consultation relating to tax avoidance involving Profit Fragmentation.

News items

DOTAS for inheritance tax – new guidance published

 On 29 March 2018, HMRC published new guidance which provides advice in relation to notifiable inheritance tax avoidance schemes. This follows changes to the description of inheritance tax avoidance arrangements that must be disclosed to HMRC from 1 April 2018.

GAAR – updated guidance published

 On 28 March 2018, HMRC published updated guidance for the general anti-abuse rule (GAAR).

Tax avoidance involving profit fragmentation – consultation issued

 On 10 April 2018, HMRC issued a new consultation seeking views on proposals to address tax avoidance involving profit fragmentation.

Case reports

Hargreaves: Loyalty pays 

In Hargreaves Lansdown Asset Management Ltd v HMRC [2018] UKFTT 127 (TC) TC06383, the First-tier Tribunal (FTT) has found that loyalty bonus payments paid to investors were not “annual payments” for the purpose of section 683, Income Tax (Trading and Other Income) Act 2005 (ITTOIA).

Hicks: Discover the limits

In J Hicks v HMRC [2018] UKFTT 22, the FTT, in allowing the taxpayer’s appeal, has held that discovery assessments issued by HMRC were invalid as the condition contained in section 29(5), Taxes Management Act 1970 (TMA), was not satisfied.

Jackson: HMRC penalised in penalties case

In Jackson v HMRC [2018] UKFTT 0064 (TC), the FTT has held that HMRC misapplied the law in respect of penalties it had issued to the taxpayer for filing late returns.