Tax Investigation Closed Through Contractual Disclosure Facility (CDF)

Apr 13, 2020 | Contractual Disclosure Facility (CDF), Tax Advice, Tax Investigation | 0 comments

This client came to us from Derbyshire and was already under a tax investigation for failing to disclose income. We considered the merits of the case and suggested that a full disclosure under Contractual Disclosure Facility (CDF) would be the most effective way to conclude matters in contrast to a lengthy exchange of correspondence with HMRC inspector resulting in tax and high professional fees.  The proposal was put forward to HMRC inspectors and they agreed to receiving a CDF. A full CDF submission was prepared and submitted which was fully accepted by HMRC. The tax and penalties payable as a result were quite minimal compared to what had initially been estimated. We are grateful to HMRC officers involved for their cooperation and support. Please click here to view HMRC’s acceptance of the CDF and conclusion of the matter. 

Our analysis: This was an interesting case where our firm and HMRC worked in cooperation to bring an early and effective closure to a tax investigation. Had the conventional route of entering into prolonged correspondence and dispute been entered, this would have taken significantly longer and cost the client more in professional costs, tax and penalties etc. Although the CDF route may not be applicable in all circumstances but it is very useful to be able to identify the right strategy when approaching a tax investigation. 

Churchill Tax Advisers Help IHT Planning For Indian Born Clients

Apr 13, 2020 | Capital Gains Tax Advice, Inheritance tax advice, Inheritance Tax Planning, Tax Advice | 0 comments

This query related to inheritance tax planning and came from an Indian born high net worth individual living in the UK for over 30 years. The client had a substantial estate in India and the inheritance tax position from UK perspective was not clear on these assets. Having researched the issue, we were able to advise that the deemed domiciled rules do not apply for individuals born in India and three other countries. This meant that provided certain conditions are met, there would not be any UK inheritance tax on assets based in India. The interesting part is that there is no inheritance tax in India so effectively (with careful planning), the Indian based assets can be passed to the next generation without any inheritance tax. This particular law is not covered by UK’s tax legislation and the source had to be verified to a double tax treaty with India from almost 60 years ago! This can open doors for tax planning for many wealthy Indian born individuals that have been living in the UK for some time. There are some traps for capital gains tax but once again with careful planning, this can also be avoided.

Churchill Tax Advisers Advise On Structuring For A Large Development

Apr 13, 2020 | Capital Gains Tax Advice, Inheritance Tax Planning, Tax Advice, Tax planning

This case came to us from a firm of accountants in London and involved a large property development project. The issues at hand were how to mitigate potential inheritance tax, capital gains tax and income tax implications for the owners. Recent changes in the tax legislation on using structures such as limited liability partnerships created further complexities. We were able to put together a structure, in light of the new legislation, whereby our clients could achieve lower income tax liabilities as well as capital gains tax and flexibility to mitigate potential inheritance tax liabilities. By seeking specialist advice prior to the commencement of the development project our client can have benefits in the short and long term. Had this advice not been taken at this stage, there could have been significant tax implications for making any alterations due to the rise in the value of the property subsequent to the development work.