The success or failure of an intended tax treatment on any transaction can depend on how well the transaction is planned and implemented.
The gap between the intended tax consequences, and the tax actually applied by HMRC can be vast. For example, if a disposal is treated as a Capital Gain, the tax could be as low as 10% of the gain (not the amount received), whereas if it is treated as income, the tax could be as high as 45% of the amount received.
It is important to ensure that a thorough review of a proposed transaction is carried out before any transaction takes place, to check that the rules are being properly interpreted and applied, and the documentation supports this treatment. It is never too early to plan ahead as sometimes you will have choices or options ahead which could affect the tax liabilities and if you don’t know the impact you could make an ill informed decision.
After the transaction occurs, you then have to make sure tax payments, tax returns and any other reporting requirements are completed on time and again supporting the intended treatment.
To complete a Pre Transaction Review we will identify whether the commercial validity and effectiveness of the transaction achieves what you want it to and in the best way possible. It helps to measure and identify against Income Tax, Capital Gains Tax, Capital Allowances, Stamp Duty Land Tax, VAT and many other implications.