Extension of clearances HM Revenue & Customs provide to business owners
At Pre-Budget Report 2007, as part of the review of links with Large Business, we announced that from April 2008 HM Revenue & Customs (HMRC) would provide business with our view of the tax consequences of significant commercial issues wherever there is uncertainty, regardless of when the legislation was enacted. We also committed to responding to clearance applications within 28 days as the norm.
On 1 May 2008, we commenced a six month trial extension of the service to business owners in relation to inheritance tax business property relief where there was a significant commercial issue or transaction of the business itself.
Today we announce that the inheritance tax business property relief clearance service for business owners will continue and will include an extension to the scope of the service
Please see the guidance on the clearances process and how to apply.
For all business owners
As with other clearances we will:
- remove the four Finance Act restrictions that inheritance tax clearance applications are subject to under Code of Practice 10 (COP10) where the application relates to the availability of business property relief
- expect applicants to demonstrate the commercial significance of the transaction that causes genuine uncertainty
- expect them to identify what aspect of the law or HMRC practice they consider to be uncertain
- respond within 28 calendar days, as the norm
Extension
From today we will also provide our view of the tax consequences of a transfer of value that involves a change of ownership of a business where this transfer, leaving aside the application of business property relief, would result in an immediate inheritance tax charge and provided that the other conditions are met. Clearances in these change of ownership cases will remain valid for a limited period of six months.
An applicant who has previously had an application rejected because it fell outside the scope of the trial service, but the circumstances are such that it would be included in the scope of the extended service, may request a review of the original application.
Contacts
All business owners and those acting on their behalf should send their applications relating to inheritance tax business property relief to:IHT Technical Team (Clearances)
Ferrers House
Castle Meadow Road
Nottingham
NG2 1BB
Email: IHT-BPR Technical Team (Clearances)
