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Service Charges: Law and Practice

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Tax support is integral to many of the corporate and property deals we undertake.  Our leading specialist has more than 30 years' experience and is applauded by clients for his creative, commercial and user-friendly approach.

 

Look closer
The Chancellor announced on Tuesday 8th October a fundamental change in the Capital Gains Tax regime for individuals, trustees and personal representatives selling assets on or after 6 April 2008.  For Capital Gains Tax purposes, the crucial date for a sale is exchange of contracts, unless the contract is conditional in which case the crucial date is when the conditionality is satisfied. The fundamental changes are:

  • Taper relief is abolished for sales on or after 6 April 2008.  There is no deduction for taper relief accrued up to 5 April 2008
  • Relief for preserved indexation relief accrued up to 5 April 1998 (when taper relief was introduced) is abolished for sales on after 6 April 2008.  For an asset such as a shareholding acquired as far back as the 1980s or the early 1990s, this can make a significant difference to the Capital Gains Tax cost of the asset.  Accrued indexation relief to 5 April 1998 for an asset bought in 1982 could increase the cost of the asset by over 100%. For sales on or after 6 April 1998 only the original base cost of the asset can be taken into account
  • All Capital Gains will be charged at flat rate of 18% no matter whether the seller is a basic rate taxpayer or a higher rate taxpayer.
  • Once again, shareholdings in the same company acquired at different times will be pooled, simplifying the share acquisition rules

There will be winners and losers for these changes.  A seller of a shareholding acquired recently with no indexation relief and minimal taper relief and who is a higher rate tax payer will be a significant winner if the sale occurs on or after 6 April 2008.  A Seller of a shareholding acquired sufficiently long ago to accrue significant indexation relief and/or maximum business asset taper relief will be a significant loser and should consider accelerating any sale so as to occur before 6 April 2008.


OUR SERViCE:

Clients work with our tax team because:

  • many of our lawyers are also qualified Chartered Tax Advisers
  • our experience in a wide variety of schemes relating to company acquisitions, disposals, mergers and reconstruction, management buy-outs and buy-ins of companies, transaction planning, Value Added Tax/Stamp duty land tax - with particular reference to commercial property and property development, stamp duty on commercial and property transactions, offshore commercial structures, negotiation and settlement of serious Revenue and Customs investigations.  Our private client team also provide international tax planning advice
  • Particular experience advising on Employee Share Schemes
  • Brian Slater is the author of the UK guide to VAT on Property Transactions and co-author of Service Charges: Land and Practice - and thus acknowledged as a leading expert in the field

RECENT EXPERIENCE ADVISING:

  • shareholders of Blues Clothing on the management buy-out of the company
  • AIM listed Jelf Group Plc on complicated tax structures concerning its acquisition of SPS Wellbeing Ltd for up to £10 million, a market leading specialist healthcare and group risk intermediary, and putting into place a Long Term Incentive Plan
  • the management of Conran Restaurants on a buy-out of the restaurant business
  • a well known entertainer on tax residence issues in the United Kingdom
  • owners of the Daily Telegraph on its acquisition of Victoria Plaza and subsequent lettings, including VAT and SDLT structuring
  • BCD Travel (UK) Limited on its acquisition of an Irish travel Agency, Tommy Tobin Travel Limited

Call me for immediate guidance:

Brian Slater

Brian Slater