Latest blog entries: a place in the sun

Accounting hot,
E&Y hottest

It’s official: accounting is hot. That’s according to Business Week’s annual
careers survey.
The Big Four take four of the top five places in the Best Places to Launch a
Career 2008 league table. KPMG is knocked into fifth place by Goldman Sachs,
with PwC third, Deloitte second and E&Y nabbing the top spot.

More surprising though is that despite talk of layoffs by the big firms
elsewhere, the Big Four do so well. But it seems there is little link between
career longevity and an organisation being a good place to start out. After all
investment banks do well too.

Holiday homes,
HMRC’s latest

The recent press release from HM Revenue & Customs in respect of holiday
homes abroad is not necessarily the good news that many believe. It confirms
that individuals who own holiday homes through companies will not suffer a
benefit in kind tax liability due to the company asset being made available to
them. The change in HMRC position applies to all years, including those in the
past. The press release goes onto give details about mechanisms to recover taxes
paid for past periods.
Clearly the concept of the relieving provision is a step in the right direction,
especially if the change is backdated in the favour of the individual. So where
is the ‘sting in the tail’?
HMRC sets outs the conditions that need to be satisfied for no benefit to arise.

One of the conditions is that the property owning company is owned directly by
the individual in question (or his family).

This is important and may be overlooked by some taxpayers. HMRC have
confirmed that the revised legislation is designed to avoid a charge where the
taxpayer may have accidentally suffered one.

As such, indirect ownership of the company shares (e.g. via trusts) is not
exempted by the new relieving legislation and the possibility of a benefit in
kind will continue.

There is also the question of the extent that the foreign entity will be a
company for the purposes of the exemption, because the legislation uses the term
‘company’ and not ‘body corporate’.

I suspect that there will be a good few years of uncertainty as to the extent
that some of the more unusual (and exotic) foreign property ownership vehicles
are a company for these purposes.

Richard Verge,

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