Tax Bulletin Issue 8

"Revenue Decisions" were effectively short case studies, intended to give you some insight into our approach in the particular case, but confined to the particular facts of that case. Unlike "Interpretations," they are not intended to illustrate points of principle of general application, as the "health warning" in each issue makes clear.

It may be that the distinction between "Decisions" and "Interpretations" has not always been fully appreciated and we wonder therefore whether you might prefer to see "Decisions" written in such a way as to be of more general application -- in other words, converted into "Interpretations".

As usual, any general thoughts or views you may have on the publication are welcome, but your views on the worth of the "Revenue Decisions" section, sent to Room 402, 22 Kingsway (see Foreword), would be particularly appreciated as we continue to develop the Bulletin as something which we hope you will find useful in your work.

The Content of Tax Bulletin offers some insight into the thinking of our technical specialists on particular issues.The Bulletin does not replace formal Statements of Practice.

Publication will be four times a year, and include a cumulative index on an annual basis.

The first Editor of Tax Bulletin, Charlie Gordon, has been seconded to the Cabinet Office. Please send any comments and suggestions, including suggestions for subjects you would like to see covered, to his successor:

Louise Boyle
Room 402,
22 Kingsway,
London, WC2B 6NR

We are sorry though that neither she nor our contributors will normally be able to enter into correspondence about Tax Bulletin or its contents.

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Tax Bulletin is covered by Crown Copyright. There is no objection to firms copying the Bulletin for their own use. Anyone wishing to republish Tax Bulletin or extracts more widely should write to

Dorothy Ridley
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Somerset House,
London, WC2R 1LB.

You should address any enquiries about obtaining Tax Bulletin to either Tom Davis or Alan Brown at the

Inland Revenue, Press Office,
6th Floor, North West Wing,
Bush House, Aldwych,
London, WC2B 4PP
Tel 071-438 6692/6706/7327.

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SIMPLIFIED ASSESSING:
AN INTRODUCTION

In the last issue of Tax Bulletin we promised a series of articles to help everyone prepare for the introduction of Simplified Assessing. At that time it was too early to do any more than echo the then Chancellor's headline statement on this issue and this article will flesh out the proposal in a little more detail, including the proposed timetable for implementation. The project has been informed by the consultation process, to which tax practitioners and other interested people contributed. In the article that follows you will see that there have been some important modifications to the proposals, and in some cases these echo the thrust of the comments which were made.

A SIMPLER SYSTEM FOR TAXING THE SELF-EMPLOYED

Simplification of the way in which we assess and collect tax has been frequently looked at over the years but the start of the current proposal could be said to be the issue of the consultative paper, "A Simpler System for Taxing the Self-Employed" in August 1991. That paper proposed options for reforming the basis of assessing the self employed to make it simpler and more straightforward for them. The responses to that paper supported the need for change, showed a clear preference for the Current Year (CY) basis for income from self- employment and, in many cases, suggested that the reforms could apply more widely than just to the self-employed.

A SIMPLER SYSTEM FOR ASSESSING PERSONAL TAX

The responses were reflected in the next consultation paper, A Simpler System for Assessing Personal Tax, issued in November 1992, which proposed bringing in a simpler system for assessing and collecting tax from everyone who receives a tax return. This would be achieved by putting all income onto a common current year basis with common payment rules, and dealing with all sources together to arrive at a single figure of total tax due. This would allow people to self- assess, if they so wished, but there would be a facility for the Revenue to continue to compute the tax due from the details on a completed return.

The paper expanded on the details of these proposals to suggest how the system could be made to work and the procedures that would be needed to allow us to make checks, both to ensure that the system was working properly for everybody, and to deter and detect tax evaders. It also proposed that there could be significant further simplification if all self-employed people were to make up their accounts to, or close to, the end of the tax year.

THE WIDER CHANGE PROGRAMME

Simplified Assessing is an important part of our major change programme. One of the 4 main themes of the change programme is simplifying and streamlining our work, and Simplified Assessing is the major contributor so far towards delivery of improvements in this area. The other 3 improvement themes are:

re-organising our office structure
making more use of Information Technology, and
changing the way we manage our work and our people

and these are all reflected, to some extent, in the Simplified Assessing proposals.

CONSULTATIONS

The great majority of those who responded to the consultative documents were in favour of simplifying the system for assessing personal tax and of the main thrust of the proposals. But there was considerable opposition, particularly from accountants, to the proposal for fiscal accounting. The support for simplification was confirmed by the responses to an independent research survey of the self-employed and agents carried out in January.

CONSULTATIVE COMMITTEE

In addition to these two public exercises, the Representative Bodies have had, and continue to have, considerable input on the proposals as they have evolved. We have had frequent meetings with the Representative Bodies at which the detailed impact of the proposals has been discussed.

The responses to the consultative papers, the results from the survey and the comments from Representative Bodies all helped inform decisions about the way forward announced by the former Chancellor on 16 March 1993.

CHANCELLOR'S BUDGET STATEMENT

Mr Lamont announced that he proposed a major reform of the system for assessing personal tax so that it would make the process of making tax returns and paying tax simpler.

The proposals were to:

abolish the complex "preceding year" (PY) basis of income tax for the self-employed
give all those who complete tax returns the option of self- assessment ie working out their own tax bill
give them one tax statement, with one tax bill, for all their income.

But in the light of the results of the extensive consultations, the new system would:

apply from the 1996/97 tax year
not oblige people to adopt a tax-year end accounting date.

PROPOSED KEY DATES

If Simplified Assessing is to get off to a successful start, early appreciation of the timetable is essential. The key dates shown below, and illustrated in figure 1, map the change from the current system to Simplified Assessing and reflect the dates originally proposed in the second consultative paper. The dates for key events have not finally been decided and the 1 January date for filing a return with a self-assessment, and for making balancing payments in particular, has been criticised both in representations and by the Consultative Committee. The payment date that is finally adopted will have an important impact on cash flow to the Exchequer, and is ultimately a question for Ministers to decide.

FIGURE 1: SIMPLIFIED ASSESSING -- TIMETABLE FOR IMPLEMENTATION

Self-Assessment

First year of optional self-assessment 1996/97
Normal date of issue of return April 1997

Return due by

1 October 1997 (for Revenue calculation)
1 January 1998 (for Self-Assessment)

Tax due for 1996/97

1 January 1997 Schedule D first instalment -- old basis
1 July 1997 second instalment -- old basis
1 January 1998 Final balancing payment/repayment including tax at higher rates on income taxed at source and Capital Gains Tax.

Tax due for 1997/98

1 January 1998 First interim payment (all income sources)
1 July 1998 Second interim sources payment (all income sources)
1 January 1999 Final payment/repayment including Capital Gains Tax)

Transition from the previous year to current year basis for Schedule D

The last year for the preceding year basis will be 1995/96 and the first for the current year 1997/95. For continuing businesses 1996/97 will be taxed on a transitional basis taking 12 months average of the profits from the end of the period forming the basis of the 1995/96 assessment to the end of the accounting period in 1996/97.

For example, if the accounting date is 30 September, 1996/97 profits will be based on half the profits from 1 October 1994 to 30 September 1996. For other sources of income tax under Schedule D on a preceding year the basis of assessment for 1996/97 will be the average of the income for the two years to 5 April 1997.

For businesses commencing after 5 April 1994 new commencement rules, to be announced, will be applied rather than the existing rules under Section 61 ICTA 1988.

What it means -- getting up to date

These dates may seem a long way off but it is not too soon for you to use the opportunity to bring your clients' affairs up to date. From 1997 it will be necessary for people to be able to submit their returns, accounts and self-assessment within some nine months of the end of the tax year. There will be an opportunity in the transitional year to prepare an account for longer than 12 months (typically for 24 months) to assist in this catching-up process.

It is intended once the legislation is in place that we will publish information to to encourage and assist accountants and their clients in getting submission of their outstanding accounts and computations up to date to be in a position to meet the new fixed timetable for return filing under Simplified Assessing. That timetable is described in more detail in the following columns.

NORMAL RETURN CYCLE

As now returns will be issued to those who we think need a return, including all those who are self-employed or company directors. Figure 2 shows that will happen in a typical case when the system is introduced. Returns will normally be issued shortly after 5 April each year as now. But the return sent 10 a self-employed person, instead of asking for a return of profits to be assessed for the year of assessment just starting, will refer to assessable profits for the year of assessment just ended. This is in part a reflection of the change to the CY basis for income assessed under Schedule D. The return will give clear guidance on what needs to be done and by when.

FIGURE 2: KEY DATES AND EVENTS FOR THE FILING OF RETURNS AND PAYMENT OF TAX OVER THE COURSE OF A TYPICAL YEAR

Those receiving a return will have two main options, Self-Assessment or Revenue assistance and the important dates for each option are marked on Figure 2. It is important to note that for each option, recipients will still need to gather all the information and figures relating to their tax affairs. As now we will not be able to do this for them, but will of course be available to provide advice throughout the year.

Option 1. Self-assessment

The return form will incorporate a section designed to allow those who wish to do so, to compute their own tax liability for the year. Those who do this will have until 1 January after the year of assessment in which to file this return.

Option 2. Revenue assistance

Those not wishing to carry out the computation in Option 1, will be able to ask the Revenue to do this for them. If this request is made early enough we will guarantee to do the calculation and send the person concerned a statement showing how much tax is due based on the entries in the return, in enough time to give 30 days notice of this before the payment deadline.

We will need a reasonable amount of time to handle the large numbers of returns expected and the cut-off date has therefore been set at 1 October after the year of assessment. If a person submits a return after this date seeking our assistance in doing the final calculation, the service will still be available, but it will not be possible to offer the same guarantee as above.

NORMAL PAYMENT CYCLE

Figure 2 also shows the important dates for tax payments during a year. It is proposed that there will be three main dates of relevance for any one year -- 1 January in the year of assessment, July after the year of assessment, and 1 January after the year of assessment. Of these the second 1 January is the most important because it is the date by which the tax liability for the year of assessment should be fully paid. The other dates are when payments on account of the year's liability, called interim payments", are due.

Of course it will be very hard to know what the liability for the year is on those two dates so the normal situation will be that an interim payment will be half of the previous year's liability. If the tax liability for the year was the same as the previous year, there would be nothing left to pay on the next 1 January (except the first interim payment for the coming year). But normally the tax liability will change from year to year so that on 1 January following the year of assessment a balance will need to be paid if tax liability has risen, or repaid if it has fallen.

The return form will lead those taking the first option shown above to their final figure of tax for the year and will also have space for working out any balancing payment and the next year's interim payments.

It may be that a person has sufficient information about his or her current year's profits/income to know that the tax liability for the year will be quite different from the previous year. This might mean that an interim payment based on half of the previous year's liability would be unfair, or cause cash-flow difficulties. If that is the case interim payments may be made based on that person's own estimate of liability based on current results. This will be accepted, though if a person reduces the interim payments below what could reasonably have been estimated at the time, sanctions may be imposed.

Also it may be the case that, although a person comes within the self-assessment scheme because a return is received each year, in fact most of his or her income is received after deduction of tax or the liability is low because profits are low. In these circumstances it may be unnecessary to make interim payments.

CURRENT YEAR BASIS

In common with the aim of giving people more control over their tax affairs through Self-Assessment, it is proposed to change the basis of assessment used to tax profits to income tax. While the PY basis of assessment currently used manages to tax a business for the same number of months for which a business is in existence, it does not tax the precise profits made over the lifetime of a business. The special provisions relating to commencement and cessation are mainly responsible for this and while there are provisions which can help to smooth this lack of equivalence, it is also a system which causes confusion and mistakes.

The current year basis ie that tax is charged on the profits shown by accounts ending in the current year of assessment, can guarantee to tax all the profits of a business once and only once over the lifetime of that business. Because it means that profits are taxed closer to the time they are earned, it is easier for those paying the tax to understand. Indeed the same considerations apply to other sources of income which are taxed on a PY basis at present. These sources -- mostly investment income -- are generally charged to tax by reference to the income earned to 5 April in the previous year. A move to the current year basis will obviously move this forward one year so that there will be an exact match between the income received in a year and the income taxed. The rules for the transition from the PY to CY basis will be the subject of a separate article.

These proposals are designed to simplify the tax system for the vast majority of people, making it easier for them to self-assess.

Further Consultations

It is intended that most of the legislation for Simplified Assessing should appear in the 1994 Finance Bill, so as to give you and your clients the maximum time to assimilate the changes that are proposed. But some matters will be included in the 1995 Finance Bill. Consultations, including consideration of draft legislation, will continue with the Representative Bodies on the Consultative Committee.

Future Articles

Our intention, over the coming issues of Tax Bulletin, is to focus on various aspects of the new system and help you, and others with an interest in tax, to understand it and the opportunities that it brings for you, your clients and for us to begin to plan, and put in place, the changes that Simplified Assessing will require.

CAPITAL GAINS TAX:
NON-RESIDENT TRUSTS

A Statement of Practice (SP5/92) and an extra-statutory concession (ESC D41) were issued on 21 May 1992 concerning the provisions in the 1991 Finance Act which impose charges to Capital Gains Tax in respect of the gains of certain offshore trusts. This note offers some guidance on certain points in the Statement and concession.

RIGHTS TO REIMBURSEMENT

Paragraph 24 of the Statement of Practice points out that failure to exercise statutory rights to reimbursement against non- resident trustees may be regarded as the provision of funds for the purposes of the settlement under paragraph 9(3) of Schedule 5, TCGA 1992. This will not, however, apply in respect of a settlor's non- exercise of statutory rights to reimbursement out of the trust income account where the settlor has a life interest in all the assets of the trust. In such circumstances, failure to exercise the right to reimbursement would, effectively, not add funds to the trust since all income would, in any ease, either be paid to the settlor under the terms of the trust deed or be used to meet expenses chargeable against income.

But even in such cases the settlor may have rights to reimbursement out of the trust capital account, eg in relation to accrued income charges, which if not exercised will be regarded as the provision of funds.

ADMINISTRATIVE EXPENSES

Paragraph 29 of the Statement of Practice concerns, inter alia, trust deeds which permit capital expenses to be paid out of the income account. Neither the existence nor the exercise of this power would cause the trust to lose an interest in possession status for IHT purposes.

Where there is no such power, paragraph 29 states that capital expenses may nevertheless be met out of income without the condition in paragraph 9(3), Schedule 5, TCGA 1992 being met; provided that the income account is subsequently restored, along with appropriate interest over the period of the loan. The appropriate rate of interest is considered to be equal to the rate payable on the Basic Account administered by the Court Office of the Supreme Courts of Justice. Such interest will constitute taxable income in the hands of the income beneficiary (either when it is credited in the case of a life tenant, or when it is paid or applied for the benefit of a discretionary beneficiary). It may also be treated as "relevant income" for Section 740 ICTA 1988 purposes.

Income beneficiaries will only be liable on the net amount of income available after deduction of any income which has been applied to meet expenses on capital account. Only when the income account is made good will that income become taxable on the beneficiary.

The original statement will be amended on these lines when it is published in the Statement of Practice booklet later this year.

ESC D41 -- DETAILED POINTS

ESC D41 allowed, inter alia, demand loans made to offshore trustees on better than commercial terms before 19 March 1991 to be put on commercial terms after that date. This enabled a trust to remain outside the condition in paragraph 9(3), Schedule 5, TCGA 1992. In order to meet the terms of this concession, it may have been necessary to pay a sum in lieu of interest in respect of periods ended 5 April 1992. Where this was the ease, such a payment would not have any IHT implications and it would qualify as a deduction both in determining the income of the life tenant and for the purposes of Section 740 ICTA 1988, provided it was paid out of trust income.

Where the amount in lieu of interest was paid to a person who is not a beneficiary under the terms of the trust, it would nevertheless be treated as a capital payment to that individual under Section 97 TCGA 1992. If the amount in lieu of interest was paid by a company underlying the trust, that payment would not qualify for a deduction from the profits of that company.

The payment of such an amount is not considered to trigger the provisions of Part XV or Section 739 ICTA 1988. Our view is that a person making a loan to the trustees on better than commercial terms is already a settlor and transferor and within the provisions of Part XV or Section 739(3) ICTA 1988.

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PAY AND FILE: FINAL UPDATE

Since this is the last edition of Tax Bulletin before the Pay and File provisions begin to take effect, it seems appropriate to devote this last introductory update to a number of commencement and transitional issues. In later editions we will return to Pay and File and look at some of the practical issues which have arisen.

COMMENCEMENT AND TRANSITION -- GENERAL

The payment and interest rules of Pay and File apply to accounting periods that end on or after 1 October 1993, irrespective of when the accounting period began. Mainstream Corporation Tax for such periods will therefore be payable without assessment nine months and one day after the end of the accounting period.

Notices to make returns for such accounting periods will not, however, begin to be issued until January 1994. During October, November and December we will still be issuing old-style return forms (CT1) for accounting periods ending before 1 October, mainly for those that end during July, August and September. The filing (and late filing penalty) provisions of Pay and File accordingly apply where the notice to make the return is issued on or after 1 January 1994.

There will be a few cases in which we do not serve a notice, before 1 January 1994, requiring a return to be made for an accounting period that ended before 1 October 1993 -- perhaps because we are not aware that a company is active, or because we have lost touch with it, or because we expect its next accounting period to end after 30 September. In such transitional cases, the filing (and late filing penalty) provisions of Pay and File will apply to the return but the payment and interest provisions will not apply to any Corporation Tax liability there may be. But special transitional arrangements will apply, as follows.

TRANSITIONAL CASES -- LATE FILING PENALTIES

As an administrative measure, we do not propose to impose late filing penalties (or higher rates of such penalties) in the transitional cases described above before the time when a penalty (or liability to a higher penalty) would have been incurred if the accounting period had ended on October 1993. In other words:

where the statutory filing date ("the final day for the delivery of the return" -- Section 11(4) TMA 1970, as amended for Pay and File) falls before 1 October 1994, the late filing penalty of £100 will not be charged if the return is delivered before 1 October 1994 and the late filing penalty of £200 will be reduced to £100 if the return is filed before 1 January 1995;
where the date on which a tax-geared late filing penalty is incurred falls before 1 April 1995, we will not charge such a penalty if the return is filed by that date;
where the date on which a late filing penalty of 20% is incurred falls before 1 October 1995, we will charge the penalty at 10% if the return is filed between 1 April and 1 October 1995.

TRANSITIONAL CASES -- INTEREST

In a transitional case of the kind described above the return will not be due until after the earliest date from which Corporation Tax could carry interest under Section 86 TMA 1970. In such a case Paragraph 3 of Schedule 14 to the Finance Act 1993 provides that Section 86 interest will run from that earliest date. The provision is subject to a specific power of mitigation.

Example

A Ltd regularly draws up accounts to 31 October. Unknown to the Inspector, A Ltd ceased trading on 31 March 1993 and became an investment company. In January 1994 we issue a notice under Section 11 TMA 1970 specifying the year ended 31 October 1993. Returns for its accounting periods ended 31 March 1993 and 31 October 1993 are therefore due to be filed by 31 October 1994.

If the Inspector were aware now that an accounting period had ended on 31 March 1993 he or she would issue an old-style CT1 and ensure that an estimated assessment was made in time for tax to become payable on 1 January 1994. Paragraph 3 will ensure that Section 86 interest will run from January 1994, irrespective of when the assessment is made.

TRANSITIONAL CASES -- MITIGATION OF SECTION 86 INTEREST

We will not invoke Paragraph 3 if an assessment is made bringing sufficient tax into charge by the normal due date. Companies will therefore be able to avoid bringing themselves within the transitional provisions by ensuring that an adequate assessment is made by this time. This is in line with the current practice on charging Section 88 interest for delay in making a return.

Where such an assessment is not made, liability to Section 86 interest chargeable by virtue of Paragraph 3 will be mitigated so as to ensure, as far as possible, that the company's exposure to interest will be no greater than it would have been if the requirement to deliver a return had been imposed under the pre-Pay and File provisions. Cases in which mitigation will be considered are those in which:

the accounting period concerned runs to the normal accounting date of the company, and
either the company has notified its chargeability to Corporation Tax for the period in accordance with Section 10 TMA 1970, or the obligation to notify is displaced by the issue of a notice under Section 11 TMA 1970 and the return is made within the Pay and File time limit.

An accounting period will be treated as running to the normal accounting date of the company if:

it lasts for 12 months (or, exceptionally, for any established shorter period) or
if it is the first accounting period of the company, it runs to a date that was notified to the Inspector not later than eight months after its end. In these cases the interest charge will be mitigated so that it runs from the later of;
60 days after the notice is issued and
the normal due date.

TRANSITIONAL CASES -- GROUP RELIEF

The new code for group relief claims under Pay and File (Schedule 17A ICTA 1988, introduced by Section 100 and Schedule 15 FA 1990) applies to claims for accounting periods ending after 30 September 1993. There will be cases in which the accounting period of the claimant company ends after 30 September 1993 but the corresponding accounting period of the surrendering company does not. We have been asked what should happen in those cases. The answers are:

For the claimant company

The time limits and documentation requirements of Schedule 17A apply. The claim should be made in the Pay and File return (or an amended return) and be accompanied by a copy of the notice (or notices) of consent.

For the surrendering company

The provisions of paragraph 10(5) and (6) of Schedule 17A (requiring the surrendering company to make an amended return in certain circumstances) will not apply -- unless, by chance, the surrendering company's corresponding accounting period is a transitional one, in the sense described above.

PUBLICITY AND ADMINISTRATIVE ARRANGEMENTS FOR PAY AND FILE

We published a "General Guide to Corporation Tax Pay and File" (IR126) in June. It is a basic guide, not a technical manual. It is addressed primarily to directors and managers of companies and to secretaries and treasurers of clubs and societies. But its contents will be of general interest to practitioners, so we asked Tax Offices to send a copy of it to Corporation Tax practitioners in their area. Please refer to your Tax Office if you did not get a copy or would like further copies.

In July we issued a leaflet "Corporation Tax Pay and File" (IR128) to every company on our computer record.

We are also publishing three Statements of Practice on Pay and File:

Corporation Tax Returns under Pay and File (SP9/93)
Special Arrangements for Groups of Companies under Pay and File (SP10/93)
Board's Discretion to admit late claims to Capital Allowances and Group Relief under Pay and File (SP11/93)

Once published, copies of these can be obtained by writing to:

Public Enquiry Room,
West Wing,
Somerset House,
Strand,
London, WC2R 1LB.

Or you could call at the office. The exact date of publication is however unknown as Tax Bulletin goes to print.

Regulations governing rates of interest to be charged under Section 87A TMA 1970, and paid under Section 826 ICTA 1988, are about to be laid before Parliament so that they can come into force on 1 October. And we hope that a revised version of the Pay and File return form -- CT200 -- will be published around the end of September. The changes made to the return form, as compared with the version published in December 1991, will be relatively minor. We clearly have to reflect the changes proposed to Corporation Tax in this year's Finance Act, and we propose to allow slightly more space between the final completion box on a page, and the foot of the page, to assist people proposing to use a laser printer to fill the form in.

SECTION 419 ICTA 1988

The impact of Pay and File on liabilities under Section 419 is worth a mention in this article, if only because the obligation to pay Section 419 tax without assessment is, in chronological terms, the first Pay and File obligation that is going to arise. For an accounting period ending on 1 October 1993, for example, tax under Section 419 will need to be paid by 15 October 1993 if an interest charge is to be avoided. Section 419 tax is not fully within the Pay and File regime, in that it is not subject to the "file" provisions. The tax is due without assessment 14 days after the end of the accounting period in which the loan or advance is made and unpaid tax will carry interest from that date.

But such liability does not have to be reported in the Pay and File return. The obligation to notify chargeability under Section 419 within 12 months after the end of the AP will, however, continue to run. It can however be satisfied by the provision of a balance sheet showing details of debtor balances that are clearly identified as relating to participators or associates of participators.

At a practical level, readers should note that

we do not propose to make a routine issue of payslips for Section 419 tax in advance of assessment. Companies paying such tax in advance of assessment should do so under cover of a letter identifying the liability and the accounting period to which it relates;
interest charges will not be raised, and demand notes for tax or interest will not be issued, until the liability has been assessed.

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SCHEDULE E:
CIR V HERD -- WHAT NOW?

Practitioners will have followed with interest the progress of this case from the Court of Session to the House of Lords. Very briefly the facts were that Mr Herd had sold shares in a company of which he had been an executive director for a consideration of £380,000 and in doing so had made a profit of £379,999 ie the excess over the original consideration paid for the shares of £1.

It had been held in the Court of Session that the whole of this profit was assessable to tax under Schedule E. The Revenue appealed to the House of Lords against the decision of the Court of Session that PAYE should have been applied. This was the sole point for decision.

Their Lordships decided unanimously in the Revenue's favour that PAYE did not apply to the payment, only part of which was assessable under Schedule E.

Some commentators have recently suggested that a consequence of this decision is that we may in future expect PAYE to be operated by third parties (customers) on tips paid to employees, such as restaurant staff. That is not the case.

Generally speaking, the only situations where PAYE will apply are those where it does at present. That is either:

where there is a tronc (an organised arrangement for the sharing out of gratuities) in existence (Regulation 5 SI 1993 No 744); or
where tips are paid via the employer (eg by inclusion in credit card settlements or cheque payments).

In such cases we would expect the tronc-master or employer to operate PAYE on the payments. The House of Lords decision makes no difference to this long-standing practice.

In short, we do not foresee any operational changes resulting from the decision in the Herd case. Directorate, Operations 1, Operational Policy has written to practitioners and others who have been in touch on this matter, confirming this point.

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CORPORATION TAX:
SCOPE OF AN ACT CARRY-BACK CLAIM:
PROCTER & GAMBLE LTD V TAYLERSON

Procter & Gamble Ltd v Taylerson (TCL 3245) was concerned with the scope of an ACT carry-back claim. A claim was made under what was then Section 85(3) FA 1972 (but referred to in this article as Section 239(3) ICTA 1988), figures were agreed and the claim was settled.

Subsequently the company made a claim to carry back a trading loss from a later accounting period, and the loss carried back resulted in there being further surplus ACT for the accounting period for which the Section 239(3) claim had been made. The company could not make a new Section 239(3) claim in respect of that period because the time limit -- two years after the end of the accounting period -- had passed. (Note: under Section 239(3) surplus ACT may be carried back to accounting periods beginning within six years of the accounting period of the surplus. Under Section 85(3) FA 1972, before modification by Section 52 FA 1984, the carry-back period was two years.) Instead it argued that, since the original Section 239(3) claim was for the whole of the surplus, the later claim was merely a further aspect of the original claim.

In the High Court, Vinelott J said

"A company can only validly claim to carry back an amount of surplus ACT capable of being ascertained by reference to events which have happened when the claim is made".

In the Court of Appeal, Dillon LJ said that on the facts of the case the original claim was made for the whole of the surplus as it then appeared to be, and after discussion and amendment of figures, set-off was allowed on the agreed figures and that was the end of that claim. When something happened (the later losses) which, even at the time of the settlement of the claim, had not been foreseen, that was wholly outside that claim. Had it been possible under the two year time limit, surplus ACT generated by such future events could have been the subject of a further claim.

The Court of Appeal explicitly decided not to consider whether the basis of Vinelott J's decision was correct, although it indicated that it might be too stringent. Nevertheless, Vinelott J's decision represents the current declaration of the law on the scope of a Section 239(3) claim and the comments in the Court of Appeal that cast doubt on the statements of Vinelott J are obiter. It is therefore necessary to apply the dictum of Vinelott J referred to above.

In Procter & Gamble Ltd v Taylerson the Section 239(3) claim had been settled, even before the end of the accounting period of the losses which were the subject of the carry-back claim. (The date on which a Section 239(3) claim is settled can occasionally give rise to problems. Such a claim is settled when a decision on the claim is given by the Inspector (subject to a right of appeal) of the amount of the surplus ACT which is the subject of the claim. This remains so, even if effect is not given to the claim until a later date.)

However, a situation could arise in which a company has made a claim under Section 239(3) to carry back surplus ACT of an accounting period and subsequently, but before that claim is settled, claims to carry back losses from a later accounting period to the period of the Section 239(3) claim, thus producing additional surplus ACT for that accounting period.

On the basis of Vinelott J's judgement our view is that any additional surplus ACT resulting from the loss carried back would not be within the scope of the original Section 239(3) claim, because the loss claim had not been made when the Section 239(3) claim was made. A supplementary claim under Section 239(3) can of course be made within the two year time limit.

There can be many variations on this theme, but in our view the correct approach should always be to apply the judgement of Vinelott J and to view a Section 239(3) claim as covering only surplus ACT capable of being ascertained by reference to events (such as a claim to carry back a loss under Section 393A(1)(b)) which have happened when the Section 239(3) claim is made.

revenue interpretations

(Superseded by CA70010)

CAPITAL ALLOWANCES:
COMMERCIAL KNOW-HOW

We are sometimes asked whether capital allowances are available for capital expenditure incurred on the acquisition of commercial know-how.

In our view there are no capital allowances available for such expenditure because of the statutory definition of know-how.

Section 530 ICTA 1988 permits capital allowances to be given on capital expenditure incurred on the acquisition of know-how. "Know- how" is defined for Section 530 purposes at Section 533(7) as:

". . . any industrial information and techniques likely to assist in the manufacture or processing of goods or materials . . ." (or in mining, agricultural, forestry or fishing operations).

The terms of this definition accordingly restrict allowances to capital expenditure incurred in acquiring information relevant only to industrial or technical processes. Information relevant to commercial processes is not included.

Our view is that know-how which does not assist directly in the manufacturing and processing operations is commercial know-how. Examples include information about marketing, packaging or distributing a manufactured product. Such information does not assist directly in the manufacture of that product. Rather it is concerned with selling the product once it has been manufactured.

As such it is not in our view within the definition of know-how in Section 533(7) and so cannot qualify for allowances under Section 530.

[Sections 530 and 533 ICTA 1988]

! This Article Is No Longer Current (Deleted Index 2004)

CAPITAL GAINS TAX:
CLAIMS UNDER SECTION 72 FA 1991

There is some uncertainty as to whether a trader has to make a claim under Section 72 FA 1991 (to have unrelieved trading losses for 1991/92 onwards set against capital gains) at the same time as making a claim under Section 380 ICTA 1988 (to have trading losses set against income).

Where a trader claims relief under Section 380 to have trading losses set against general income, Section 72 allows a claim to be made to have any balance set against capital gains. In strictness, this claim must be made in the same notice as the Section 380 claim (Section 72(1)).

However we are prepared to accept a separate claim under Section 72 where:

the trader has previously made a Section 380 claim and could have claimed relief under Section 72, and
a separate Section 72 claim is made within the time limits for the original Section 380 claim, and
after giving the relief under Section 380 there is a balance of trading losses which have not otherwise been relieved, and
all the other conditions for the relief are satisfied.

[Section 380 ICTA 1988; Section 72 FA 1991]

(Article deleted since index 2002)

CAPITAL GAINS TAX:
RETROSPECTIVE CHANGES
IN RATES OF TAX

We are sometimes asked how the rules in Section 4 TCGA 1992, which charge individuals' capital gains as if those gains were the top slice of their taxable income, operate when that income is reduced following a claim to a relief such as terminal loss relief (Section 388 ICTA 1988).

For 1988/89 onwards individuals are charged to Capital Gains Tax at the rate(s) of Income Tax which would apply if their gains were treated as the top slice of their income. Depending on the amount of individuals' taxable income and the amount of their gains in any year of assessment, they could thus be charged to CGT at

20% (for 1992/93 onwards), or
25%, or
40%. or
a mixture of rates.

What happens therefore if, for example, individuals whose 1991/92 gains have been taxed at 40% have their taxable income reduced by reason of a claim to a relief so that some or all of the gains then fall to be taxed at 25%? Can the existing CGT assessment be amended?

While the answer will depend on the facts of the case we consider that the existing legislation allows this to be done.

If the time limits for making an appeal (Section 31 TMA 1970) against the CGT assessment have not expired then any retrospective change in the rates of tax would be grounds for such an appeal.

Alternatively, the individual concerned can claim the benefit of Section 42(7) TMA 1970. This allows an Inspector to give effect to a claim to a relief by way of discharge or repayment.

In our view Section 42(7) applies to cases where the claim to relief affects an individual's CGT liability as it does to cases where the claim to relief affects their IT liability.

[Section 4 TCGA 1992; Sections 31 and 42(7) TMA 1970]

! This Article Is No Longer Current (Deleted Index 2004)

INTERNATIONAL TAX:
PAYMENT BY INDIVIDUALS TO THE
UK BRANCH OF A NON-RESIDENT COMPANY

Section 349(2)(c) ICTA 1988 imposes a requirement to deduct and account for tax where interest is paid to a person whose "usual place of abode" is abroad. The aim of this legislation is to provide an easy way of collecting tax due from someone who is usually outside the UK.

For the purposes of the case law test of company residence -- the location of central management and control -- a company can generally have only one residence. We have now considered whether the same applies to a company's "usual place of abode". Are there circumstances in which a non-resident company which carries on the bulk of its business abroad can nonetheless have a "usual place of abode" in the UK?

Where a non-resident company trades in the UK through a branch and the profits of that branch are liable to Corporation Tax under Section 11 ICTA 1988 (and are not exempted under a treaty) we will accept that this presence in the UK constitutes a "usual place of abode". Tax need not therefore be deducted in accordance with Section 349(2)(c) from payments of interest made to the UK branch of such a company.

[Sections 11 and 349(2)(c) ICTA 1988]

!This article is no longer current (Deleted Index 2002)

SCHEDULE D CASE I:
"HIVE-ACROSS" TRANSACTIONS

We have been asked whether Section 94 ICTA 1988 (trading debts "released" treated as trading receipts) has any implications for a "hive-across" within a 100% corporate group. A "hive-across" is a relatively common type of transaction undertaken for reasons unconnected with tax, the substance of which is that all of the assets and liabilities of a company are transferred to another company in the same group. The transfer of trading debts from one company to another under this arrangement is in reality a composite transaction in which:

the transferee assumes the obligation to repay the creditor, and
the creditor consents to release the transferor from its obligations in return for the transferee accepting them.

Uncertainty has arisen in this area following the recent decision in the twin cases of Collins v Addies and Greenfield v Bains (1992 S746: TCL 3334), both of which were concerned with the meaning of the word "release" in the context of Section 421 ICTA 1988 (release of loans to participators in close companies).

In that context it was said that the meaning of "release" included circumstances in which the debtor gave full value. Concern has been expressed that this may have implications for the "hive- across" situation, resulting in a Section 94 charge being levied on the transferor company; notwithstanding that in global terms the debt has not in fact been released and that the old debtor company -- the transferor -- may have given full consideration in the sense that both assets and liabilities were transferred.

In these circumstances we take the view that while there may have been a "release" of a debt, Case I principles require the consideration given by the transferor to the transferee for accepting the liabilities to be deducted in computing profits, which include any Section 94 receipt. So, in the usual case in which full consideration has been given, there will be no net Section 94 charge.

[Section 94 ICTA 1988]

SCHEDULE D CASES I AND II:
SELF-EMPLOYED LORRY DRIVERS --
OVERNIGHT SUBSISTENCE (Refer to BIM 37670)

In considering the application of Section 74(a) ICTA 1988 to the cost of meals taken away from the place of business, the Courts have held that no deduction is due because it cannot be said that the expense was incurred wholly and exclusively for the purposes of the trade since everyone must eat in order to live -- see Caillebotte v Quinn (50 222).

However we have long accepted reasonable claims for the cost of evening meals and breakfast taken in conjunction with overnight accommodation if the cost of the accommodation would otherwise be allowable as an expense in carrying on the trade or profession. This practice has received the approval of the Courts, most recently in the case of Watkis v Ashford Sparkes & Harward (58 468).

Long distance self-employed lorry drivers have therefore been able to claim a deduction for the reasonable cost of meals taken in conjunction with overnight accommodation.

We have been asked whether this treatment can be extended to such drivers who spend the night in their cabs rather than take overnight accommodation. We have confirmed that it can.

It should be emphasised that it is only "reasonable" expenses which may be allowed and the expenses claimed must be supported by adequate contemporaneous records.

[Section 74(a) ICTA 1988]

(Superseded by BIM40300)

SCHEDULE D CASE I:
SUMS RECEIVED UNDER EXCLUSIVITY AGREEMENTS

The question often arises whether a lump sum payment received under an exclusivity agreement is of capital or revenue character and, if revenue, when it should be recognised as income for tax purposes.

Exclusivity agreements are a common feature of trading arrangements in various trades. They often arise, for example, between petrol suppliers and garages or between breweries and publicans. Under these agreements the trader is tied for a number of years to one supplier of goods or services and in return receives a lump sum payment. Frequently such a sum is potentially repayable but the agreement provides for the periodic waiver of the liability to repay a proportion of the sum provided the terms of the exclusivity contract are adhered to. If the agreement runs its full course, none of the lump sum will be repayable.

Our view is that such an "abatable loan" should be treated in the same way as a grant, its capital or revenue nature being determined by the purpose, in the mind of the payer, for which the trader received that sum. This requires consideration of not only the particular agreement in question but also the correspondence and discussions which supplemented the terms of the agreement.

If the supplier designates the payment for a specific capital purpose, and there is evidence that the recipient has expended it in the manner specified, then it can be accepted as a capital receipt. However, if the recipient is effectively at liberty to spend the money as he or she thinks fit, the receipt is to be regarded as an undifferentiated payment and therefore a taxable revenue receipt. For tax purposes, the reduction in each accounting period of the amount that is repayable should be recognised as a trade receipt of that period. This is consistent with normal accountancy practice.

[Walter W Saunders Ltd v Dixon (40 329) Poulter v Gayjon Processes Ltd (58 350) Ryan v Crabtree Denims Ltd (60 183) Mobil Oil Australia Ltd v Australia Commissioner of Taxation (44 A323)]

(Article deleted since index 2002)

SCHEDULE D CASES III AND IV:
BOND STRIPPING

Legislation was introduced in 1985 to amend the tax treatment of investors in Deep Discount Securities where they are issued as part of a bond stripping operation. This legislation is now contained at paragraphs 2 and 3 of Schedule 4 ICTA 1988.

TAX TREATMENT OF DEEP DISCOUNTS

Normally an investor in Deep Discount Securities is only assessed under Case III or IV of Schedule D when the securities are redeemed or they are otherwise disposed of (paragraphs 7 and 11 of Schedule 4). When these rules apply the income elements are not treated as accruing period by period. The normal rules are however disapplied in the circumstances described in paragraph 2(1)-(4) of Schedule 4 when paragraph 3 provides for investors to be assessed under Case III or IV on the accrued income element at the end of each income period. The rules in paragraphs 2 and 3 apply in particular to bond stripping.

BOND STRIPPING

The commonest form of stripping involves the repackaging of a secured fixed interest security with periodical interest payments as what are effectively zero coupon bonds. There would typically be:

a series of bonds issued at varying discounts to reflect the maturities of the individual interest payments, and
one bond reflecting the final redemption receipt.

These zero coupon bonds may be variously described (perhaps as receipts) and will often be issued on the Eurobond market. A company may, for example, invest in a "blue-chip" issue and issue its own receipts using the original issue as security.

INLAND REVENUE'S VIEW

In our view the zero coupon bonds issued in the circumstances described above will normally be Deep Discount Securities as defined in paragraph I of Schedule 4. It is our view that -- subject to the detailed provisions of Schedule 4 -- a redeemable security will be a Deep Discount Security:

if it is issued by a company or public body, and
is issued at a "deep discount" (broadly this is a difference between issue price and redemption value of 15% or more of the redemption value or 1/2% of that value for each year of the term of the security), and
which has at the time of issue a fixed yield to maturity. (This contrasts with a Deep Gain Security [Schedule 11 FA 1989] which does not require this certainty on issue.)

Stripped bonds which are Deep Discount Securities are likely to be subject to the rules in paragraphs 2 and 3 of Schedule 4 which are aimed at ensuring that the tax treatment of the bond follows that for the underlying security. The accruing income elements on the Deep Discount Securities would then be assessable on the investors under Case III or IV at the end of each income period.

If a security is issued in these circumstances, the information requirements in paragraph 13 of Schedule 4 should still be complied with. This means that the certificate for each security should show the income element for each income period. Where paragraph 2 applies the certificate should also show that tax will be chargeable in accordance with paragraph 3 of Schedule 4.

Where, however, such information is not given -- as may happen in the case of instruments issued by non-UK residents -- the basis of charge is not affected and holders should include the appropriate accruing element in their tax returns.

Guidance on the UK tax treatment of a security included in, for example, a prospectus should not be taken as reflecting our views unless it is correctly stated that our confirmation has been obtained.

[Schedule 4 ICTA 1988]

miscellaneous

(Article no longer current)

INHERITANCE TAX:
IMPROVED MONITORING OF UNDERTAKINGS
GIVEN FOR CONDITIONALLY EXEMPT PROPERTY

Sections 30 and 31 Inheritance Tax Act 1984 provide for conditional exemption from Inheritance Tax for heritage property, including works of art, buildings of outstanding historic or architectural interest, and land of outstanding scenic, historic or scientific interest. For land and buildings, we rely on the advice of heritage agencies like English Heritage and Countryside Commission when deciding on claims. For works of art, advice is sought from independent art experts.

Owners are required to give binding undertakings that agreed steps will be taken for the maintenance of the heritage property, for the preservation of its character and for securing reasonable public access to it. Owners of works of art must also keep them in the United Kingdom.

Most works of art are on display in a building open to the public and some are on long-term loan to public museums and galleries. A minority are on the Register of conditionally exempt works of art and can be viewed by appointment. The Register is computerised and can be consulted in the Victoria & Albert Museum, the National Library of Scotland, the National Museum of Wales and the Ulster Museum. Members of the public and art institutions can also purchase the Register on computer disc from Capital Taxes Office (CTO) (price £10).

We write to owners every five years to seek confirmation that the undertakings are being observed. In addition, most owners of conditionally exempt land and buildings have been required to provide annual reports to the relevant heritage agencies. A number of improvements have now been made to these monitoring arrangements. We will continue to seek written confirmation from owners every five years.

LAND AND BUILDINGS

All owners of land and buildings are now required to submit an annual report on the management of the property, its maintenance, its preservation and the degree and nature of public access.
Owners send their reports to the heritage agencies which provide us with expert advice. The agencies evaluate the report and advise us either that the position is satisfactory or highlight any areas of concern which the agencies are unable to rectify by negotiation with the owner.
In addition the heritage agencies will make an on-site visit to each conditionally exempt property at least once every five years.

WORKS OF ART

On-site inspections of a 5% sample of objects on the Register of conditionally exempt works of art will be carried out each year by fine art students, working on our behalf, to confirm that a reasonable level of access is available to the public and that other undertakings are being observed. Our view of what constitutes reasonable public access for objects on this Register was given in a Revenue Press Release dated 10 May 1993.
For a 5% sample of works of art on long-term loan to a public collection, we will seek confirmation from curators that the objects remain on loan.

These improvements are designed to ensure that any breaches of owners' undertakings are identified at an early stage so that the breach can be put right. If the owner is unwilling to observe the undertakings or sells the object, a charge to Inheritance Tax will be raised under Section 32 or 32A IHTA 1984.

! This Article Is No Longer Current (Deleted Index 2004)

PENSION SCHEMES OFFICE:
SYNOPSIS OF MEMORANDUM

The Pension Schemes Office (PSO) issued Memorandum No 116 direct to the practitioners on the PSO Mailing List on 10 June 1993.

The Memorandum is concerned with the standards of service which the PSO aims to provide to its customers in the current year (1993/94) and in particular with new procedures relating to occupational schemes which are being considered for tax approval or are discontinued.

SCHEMES AWAITING APPROVAL

It is common for new pension schemes to be set up by a short declaration of trust while the formal trust deed and rules are drafted. During this period, if the PSO consider the scheme to be approvable in principle subject only to being fully documented, tax relief for employee contributions is allowed on a provisional basis. This is commonly called "interim authorisation" and for several reasons there are a large number of pension schemes in this category.

To reduce the backlog of schemes operating on only interim authorisation the PSO are planning to introduce a progressive programme starting in 1993/94 and concentrating initially on schemes which have been operating on interim authorisation for more than four years. These schemes are expected to be fully documented at an early date and failure to do this may result in the withdrawal of the provisional tax reliefs. For the future, schemes established after 5 April 1993, are expected to be fully documented within a maximum period of two years.

DISCONTINUED SCHEMES

The Memorandum outlines revised procedures for notifying particulars to the PSO when occupational schemes are discontinued. The most important change is that PSO do not expect to be notified of the winding-up of a scheme until the process is complete.

The Memorandum includes a number of other changes in PSO practice. A copy can be obtained in writing from:

PSO Supplies Section,
Lynwood Road,
Thames Ditton,
Surrey, KT7 ODP

or by telephoning 081-398 4242 (Extn 4254).

(Update in TB 34)
PROCEEDINGS UNDER SECTION 703
ICTA 1988 IN RESPECT OF ABNORMAL
DIVIDENDS RECEIVED BY TAX-EXEMPT BODIES

On 18 February 1993 judgement was given in the case of Sheppard and Sheppard (trustees of the Woodlands Trust) v CIR in the High Court. Judgement was in favour of the trustees who had appealed against a notice issued under what is now Section 703 ICTA 1988 in respect of an abnormal dividend received by them. The Board of Inland Revenue decided that it was not proper to appeal against the decision because it was advised that there was a defect in the relevant assessment raised on the trustees.

However the Board's legal advice is that it would otherwise have had good grounds for challenging the judgement on appeal. Therefore until it can obtain further clarification of the law from the Court of Appeal or the House of Lords the Board intends to continue taking proceedings under Section 703 in appropriate cases on the footing that charities, pension funds and other tax-exempt bodies obtain tax advantages whenever they receive abnormal dividends.

INLAND REVENUE STATEMENTS OF PRACTICE AND
EXTRA-STATUTORY CONCESSIONS ISSUED BETWEEN
1 MAY 1993 AND 31 JULY 1993

STATEMENTS OF PRACTICE

Number   Title                          Date of Issue 
7/93      Insurance companies                11/6/93
Transfers of Long Term Business
8/93      Stamp Duty:                        12/7/93
New Buildings
12/93     Double Taxation                    27/7/93
Dividend Income and
Tax Credit Relief
(For 9, 10 and 11/93 see the
article on CT Pay and File, p85.)

You can get copies of SPs and ESCs from Christine Jordan at the Public Enquiry Room, Somerset House. Telephone: 071-438 7772

CONSULTATIVE DOCUMENTS: Deadline for comments

                              Deadline     Title                 Price  for comments   Address for comments
Equalisation Reserves     £4.50   29/10/93        David Clissitt
For Insurance Companies'                          Financial Institutions
Non-Life Business                                 Division Inland Revenue
Room 516,22 Kingsway
London WC2B 6NR,
or
Charles Langley
Insurance Division
Department of Trade
and Industry
10-18 Victoria Street
London SW1H 0NN

You can get copies of the above from: Inland Revenue, Reference Room, Room 8, New Wing, Somerset House. Please enclose your remittance with the order, and make cheques payable to the Inland Revenue

The information published in Tax Bulletin is reported because it may be of interest to tax practitioners. You can expect that interpretations of the law contained in the Bulletin will normally be applied in relevant cases, but this is subject to a number of qualifications.

Particular cases may turn on their own facts, or context, and because every possible situation cannot be covered there may be circumstances in which the interpretation given here will not apply.
There may also be circumstances in which the Board would find it necessary to argue for a different interpretation in appeal proceedings.
"Revenue decisions" report conclusions that were reached on the facts of individual cases, but do not necessarily include all the detailed facts which may have been relevant to the decision. They provide an indication of the approach the Revenue has adopted in the past, but have not been drafted as generally applicable statements of the Revenue's position. It cannot be assumed therefore, that interpretations of the law contained or implicit in these decisions will necessarily be applied in other cases.
The Board's view of the law may change in the future. Readers will be notified of any changes in future editions.

Nothing in this Bulletin affects a taxpayer's right of appeal on any point.

Subscribers to our news release mailing list automatically receive copies of Tax Bulletin.

To find out more, contact:

Tom Davis or Alan Brown, Inland Revenue Press Office, 6th Floor, North West Wing, Bush House, Aldwych, London WC2B 4PP
Telephone: 071-438 6692/6706/7327.

TAX BULLETIN PROVIDED IN WEB READY FORMAT COURTESY OF TAX ANALYSTS AND TAXBASE

Tax Bulletin Issue 8

INLAND REVENUE TAX BULLETIN Issue 8

CONTENTS

EDITORIAL NOTE

! This Article Is No Longer Current (Deleted Index 2004)

SIMPLIFIED ASSESSING: AN INTRODUCTION

A SIMPLER SYSTEM FOR TAXING THE SELF-EMPLOYED

A SIMPLER SYSTEM FOR ASSESSING PERSONAL TAX

THE WIDER CHANGE PROGRAMME

CONSULTATIONS

CONSULTATIVE COMMITTEE

CHANCELLOR'S BUDGET STATEMENT

PROPOSED KEY DATES

FIGURE 1: SIMPLIFIED ASSESSING -- TIMETABLE FOR IMPLEMENTATION

Self-Assessment

Transition from the previous year to current year basis for Schedule D

What it means -- getting up to date

NORMAL RETURN CYCLE

FIGURE 2: KEY DATES AND EVENTS FOR THE FILING OF RETURNS AND PAYMENT OF TAX OVER THE COURSE OF A TYPICAL YEAR

Option 1. Self-assessment

Option 2. Revenue assistance

NORMAL PAYMENT CYCLE

CURRENT YEAR BASIS

Further Consultations

Future Articles

CAPITAL GAINS TAX: NON-RESIDENT TRUSTS

RIGHTS TO REIMBURSEMENT

ADMINISTRATIVE EXPENSES

ESC D41 -- DETAILED POINTS

! This Article Is No Longer Current (Deleted Index 2001)

PAY AND FILE: FINAL UPDATE

COMMENCEMENT AND TRANSITION -- GENERAL

TRANSITIONAL CASES -- LATE FILING PENALTIES

TRANSITIONAL CASES -- INTEREST

Example

TRANSITIONAL CASES -- MITIGATION OF SECTION 86 INTEREST

TRANSITIONAL CASES -- GROUP RELIEF

PUBLICITY AND ADMINISTRATIVE ARRANGEMENTS FOR PAY AND FILE

SECTION 419 ICTA 1988

! This Article Is No Longer Current (Deleted Index 1999)

SCHEDULE E: CIR V HERD -- WHAT NOW?

! This Article Is No Longer Current (Deleted Index 1999)

CORPORATION TAX: SCOPE OF AN ACT CARRY-BACK CLAIM: PROCTER & GAMBLE LTD V TAYLERSON

revenue interpretations

(Superseded by CA70010)

CAPITAL ALLOWANCES: COMMERCIAL KNOW-HOW

! This Article Is No Longer Current (Deleted Index 2004)

CAPITAL GAINS TAX: CLAIMS UNDER SECTION 72 FA 1991

(Article deleted since index 2002)

CAPITAL GAINS TAX: RETROSPECTIVE CHANGES IN RATES OF TAX

! This Article Is No Longer Current (Deleted Index 2004)

INTERNATIONAL TAX: PAYMENT BY INDIVIDUALS TO THE UK BRANCH OF A NON-RESIDENT COMPANY

!This article is no longer current (Deleted Index 2002)

SCHEDULE D CASE I: "HIVE-ACROSS" TRANSACTIONS

SCHEDULE D CASES I AND II: SELF-EMPLOYED LORRY DRIVERS -- OVERNIGHT SUBSISTENCE (Refer to BIM 37670)

(Superseded by BIM40300)

SCHEDULE D CASE I: SUMS RECEIVED UNDER EXCLUSIVITY AGREEMENTS

(Article deleted since index 2002)

SCHEDULE D CASES III AND IV: BOND STRIPPING

TAX TREATMENT OF DEEP DISCOUNTS

BOND STRIPPING

INLAND REVENUE'S VIEW

miscellaneous

(Article no longer current)

INHERITANCE TAX: IMPROVED MONITORING OF UNDERTAKINGS GIVEN FOR CONDITIONALLY EXEMPT PROPERTY

LAND AND BUILDINGS

WORKS OF ART

! This Article Is No Longer Current (Deleted Index 2004)

PENSION SCHEMES OFFICE: SYNOPSIS OF MEMORANDUM

SCHEMES AWAITING APPROVAL

DISCONTINUED SCHEMES

(Update in TB 34) PROCEEDINGS UNDER SECTION 703 ICTA 1988 IN RESPECT OF ABNORMAL DIVIDENDS RECEIVED BY TAX-EXEMPT BODIES

INLAND REVENUE STATEMENTS OF PRACTICE AND EXTRA-STATUTORY CONCESSIONS ISSUED BETWEEN 1 MAY 1993 AND 31 JULY 1993

INLAND REVENUE TAX BULLETIN
Issue 8

SIMPLIFIED ASSESSING:
AN INTRODUCTION

CAPITAL GAINS TAX:
NON-RESIDENT TRUSTS

SCHEDULE E:
CIR V HERD -- WHAT NOW?

CORPORATION TAX:
SCOPE OF AN ACT CARRY-BACK CLAIM:
PROCTER & GAMBLE LTD V TAYLERSON

CAPITAL ALLOWANCES:
COMMERCIAL KNOW-HOW

CAPITAL GAINS TAX:
CLAIMS UNDER SECTION 72 FA 1991

CAPITAL GAINS TAX:
RETROSPECTIVE CHANGES
IN RATES OF TAX

INTERNATIONAL TAX:
PAYMENT BY INDIVIDUALS TO THE
UK BRANCH OF A NON-RESIDENT COMPANY

SCHEDULE D CASE I:
"HIVE-ACROSS" TRANSACTIONS

SCHEDULE D CASES I AND II:
SELF-EMPLOYED LORRY DRIVERS --
OVERNIGHT SUBSISTENCE (Refer to BIM 37670)

SCHEDULE D CASE I:
SUMS RECEIVED UNDER EXCLUSIVITY AGREEMENTS

SCHEDULE D CASES III AND IV:
BOND STRIPPING

INHERITANCE TAX:
IMPROVED MONITORING OF UNDERTAKINGS
GIVEN FOR CONDITIONALLY EXEMPT PROPERTY

PENSION SCHEMES OFFICE:
SYNOPSIS OF MEMORANDUM

(Update in TB 34)
PROCEEDINGS UNDER SECTION 703
ICTA 1988 IN RESPECT OF ABNORMAL
DIVIDENDS RECEIVED BY TAX-EXEMPT BODIES

INLAND REVENUE STATEMENTS OF PRACTICE AND
EXTRA-STATUTORY CONCESSIONS ISSUED BETWEEN
1 MAY 1993 AND 31 JULY 1993