30 June 2014

Rural Update - News in brief


  1. The case of HMRC v The Executors of Lord Howard of Henderskelfe (deceased) related to a painting owned by the late Lord Howard, which hung in the part of Castle Howard which was open to the public and run as a business. The Executors argued that the painting was “plant” used in the trade and should be treated as a “wasting asset” for capital gains tax purposes. The Court of Appeal has recently confirmed this analysis on appeal from the Upper Tax Tribunal, meaning that there was no capital gains tax on a sale of the painting.
     
  2. Under the Finance Act 2014, companies which benefit from specific renewable energy credits and incentives will no longer qualify as Enterprise Investment Schemes or Venture Capital Trusts. Taxpayers looking to shelter gains in such entities will therefore need to fund the EIS or VCT before Royal Assent, likely to be mid-July 2014. Changes will also be introduced for partnerships – ‘junior' partners could be treated as employees under these changes, rather than partners, and where corporate partners are indirectly owned by individual partners, the profits of the corporate partner will likely be treated as those of the individual partner(s) and taxed at the higher rates.
     

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