- 1. The Scope of the Book: Estate Planning Introduced
- 1.2.3 Other Taxes
- 1.5.14 Tackling tax avoidance: the 22 June 2010 Emergency Budget Proposals
- 1.6.1 ‘Spotlights’ and ‘Signposts’
- 2. Inheritance Tax Mitigation: The Basics
- 3. Making Gifts: Outright or Protected?
- 3.2.3 The pre-owned assets regime
- 3.2.4 Settlor-interested trusts: Income Tax and CGT
- 3.6.3 Formation
- 4. Trusts: Tax-Efficient Management
- 4.4.3 Capital Gains Tax
- 4.7.6 Related settlements
- 4.9.3 Power to accumulate or a discretion over income
- 5. The Family Home(s)
- 6. The Family Business
- 6.1.3 Capital Gains Tax angles
- 6.1.4 Other taxes
- 6.2.7 The period of ownership
- 6.3.1 The announcement of 24 January 2007 - and increasing thresholds
- 6.3.2 The detail of the legislation
- 6.6.2 Partnerships
- 9. Investments
- 10. Life Assurance
- 11. Pensions
- 11.1.2 Pensions not to be used for IHT mitigation
- 11.5.1 Overview
- 11.5.5 Death benefits
- 11.5.6 Age 75: ASP or annuity purchase?
- 12. Charitable Giving
- 12.2 Charities: The ‘fit and proper persons’ test in FA 2010
- 12.2.3 Tax advantages for donors summarised
- 12.2.3.1 Gift aid carry back: time limit for claim
- 13. The Family Unit
- 15. Leaving the UK
- 15.3.7 Gifts from UK to non-UK domiciliaries and reservation of benefit
- 15.3.8 Domicile: prospective government review
- 15.5.7 Differing status for different members of the family
- 16. Non-UK Domiciliaries Living in the UK
- 16.1.5 Further review of non-doms promised on 22 June 2010
- 16.3.2 Compliance
- 16.4.4 IHT and double taxation: the pre-capital transfer tax treaties and Switzerland
- 16.6.1 The statutory rule
- 16.6.2.1 Excluded property settlements and the UK private residence
- 17. Offshore Trusts and Companies
- 17.5.2 The capital payments charge in more detail
- 17.7.4 The transfer of assets abroad regime: non-UK resident childrens trusts
- 18. Wills
- 18.4.3 The transferable nil-rate band
- 18.5.5 Different structures: the balance of advantage
- 18.6.1 The issues, subject to the transferable nil-rate band
- 18.6.2 Statement of Practice SP 10/79
- 19. Post-death Planning
- 20. Compliance
Chapter: 2 - Inheritance Tax Mitigation: The Basics
Value Added Tax
2.14.4
Just as for SDLT, a gift pure and simple should have no VAT implications. But if the subject-matter of the gift forms part of a VAT registered business and involves the removal of one or more assets from that business and those assets are land, there is a liability on the business to pay VAT at 17.5% [15% from 1 December 2008 to 31 December 2009 and 20% after 31 December 2010] on the market value of the asset (VATA 1994 Sch 4 para 5). For example, a gift by her parents to their daughter on her marriage of one of a number of holiday cottages would trigger an unexpected VAT liability on the parents. The only way that this consequence could be avoided might be to have the whole business given away and to arrange things such that the ‘transfer of a going concern’ provisions apply so as to take the transaction outside the scope of VAT.
A temporary reduction in the standard rate of VAT, from 17.5% to 15%, for supplies from 1 December 2008 to 31 December 2009 inclusive, was announced in the Chancellor’s pre-Budget Report on 24 November 2008 and extended by Budget 2009. Zero-rated supplies, exempt supplies and 5% reduced supplies are not affected. FA 2009 Sch 3 introduced anti-forestalling legislation to ensure that businesses cannot use artificial arrangements to reduce the VAT rate on goods or services to be provided after the rate reverts to 17.5%, in a case where there is no current economic activity. Genuine commercial transactions should not be affected.


