About Hannah Evans

CORPORATION TAX -Reform to Real Estate Investment Trusts (REITs)

A new consultation document has been published by H M Treasury on changes that are expected to make the use of REITs more flexible as well as reducing the costs of establishing REITs.

A company may elect to become a UK REIT where it owns income-producing real estate. The main benefit of becoming a REIT is that the profits and gains arising from the property rental business are exempt from corporation tax.

Please read the further information for the proposed changes outlined in document. The closing date for comments on the consultation is 27 June 2012.

The consultation document concerns two separate issues relating to REITS.

  • To explore the potential role social housing REITs could play to support the social housing sector. This would offer social housing providers an alternative source of financing to fund their future housing developments.
  • To consider amending the tax treatment of income from REITs investing in other REITs, in order to facilitate investment diversification opportunities for REIT investors.

Follow this link for the consultation document in full

http://www.hm-treasury.gov.uk/d/condoc_reforms_to_reit.pdf

INHERITANCE TAX – Filing of trust and estate returns

If you file a Self Assessment Trust and Estate Tax Return, there have been a number of changes to the return form that you will need to be aware of for 2011-2012.

HMRC have published a list of changes to the 2011-12 Self Assessment Trust and Estate Tax Return and supporting guidance notes.

There have been changes to the following sections of the return and guidance notes:

  • SA900 – main part of the return
  • SA950 – notes on the SA900
  • SA901L Notes – Lloyd’s underwriters
  • SA902 Notes – partnership
  • SA903 – UK property pages
  • SA903 Notes
  • SA904 Notes – foreign
  • SA905 – Capital gains pages
  • SA905 Notes
  • SA906 Notes – Non-residence

For full details of the changes, please see HMRC’s release    http://www.hmrc.gov.uk/trusts/agents/changes-return11-12.pdf

Trust and Estate Tax Returns can be submitted online or by way of a paper return. Paper returns must be submitted at an earlier date of 31 October.

The use of the online filing system allows for a more generous filing deadline of 31 January and typically reduces the amount of time it takes for HMRC to process any tax repayments.

INCOME TAX – Buying and selling goods online

HM Revenue and Customs have introduced a voluntary disclosure facility to target individuals who should be paying tax on income they earn from buying and selling goods direct to others using online marketplaces such as EBay.

The e-Markets Disclosure Facility campaign launched by HMRC does not target people who only sell a few personal items online as they are unlikely to be trading.

Qualifying online traders have a deadline of 14 June 2012 to notify HMRC of their intention to make a disclosure by completing an online notification form available at www.hmrc.gov.uk/campaigns/notify.htm

An actual disclosure together with an arrangement to make payment of all tax, interest and penalties due must be made by 14 September 2012.

Making a disclosure using the e-Markets Disclosure Facility can significantly reduce the amount of penalties due and should avoid the possibility of criminal investigations taking place. Most disclosures will be subject to a maximum penalty rate of up to 10%.