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Bereavement payments

The Bereavement Allowance was a weekly benefit that was payable to certain widows, widowers, or surviving civil partners whose spouse or civil partner died before 6 April 2017. Prior to that date, it was also possible for qualifying applicants to claim the Widowed Parent’s Allowance and Bereavement Payment.

The new Bereavement Support Payment was launched on 6 April 2017. The Bereavement Support Payment replaced Bereavement Allowance, Widowed Parent’s Allowance and Bereavement Payment. If you lose your spouse or civil partner on or after 6 April 2017 you may be eligible to claim the Bereavement Support Payment.

You could be eligible to claim if your partner either paid National Insurance contributions for at least 25 weeks or died because of an accident at work or a disease caused by work. You must also be below the State Pension Age in order to claim Bereavement Support Payment. The new system of state bereavement payments usually means a more generous initial bereavement payment, but further support payments may be less than under the old system.

HMRC has a specialist bereavement services team that deals with PAYE and Self Assessment issues which arise when a taxpayer dies. In most cases, the team provides family members or personal representatives with a single point of contact when finalising the PAYE and Self Assessment affairs of the deceased.

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Selling digital services to EU based customers

There are a number of VAT issues to consider if you are selling digital services from the UK to consumers based in other EU countries. Since 1 January 2015, the place of supply rules for these types of service is determined by the location of the customer who receives the service rather than the location of the supplier.

Digital services include things like radio and television broadcasting, telecommunications services and electronically supplied services such as video on demand, downloadable music, games, apps, software and ebooks.

The definition of digital services does not include the sale of goods where the order and processing is done electronically, services of lawyers and financial consultants who advise clients through email or advertising services, supplies of physical books and advertising services in newspapers, on posters and on television.

Planning note

If you are deemed to be suppling digital services to consumers in other EU countries you must either register for VAT in each country where you are supplying digital services or sign up to use the VAT Mini One Stop Shop (MOSS) service.

The MOSS scheme is an electronic system that allows businesses to register in only one EU member state and submit a single VAT return and payment each quarter for all their cross-border supplies of digital services. If you are unsure as to the correct VAT liability of the digital services you are providing, we can help.

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What is Business Asset Rollover Relief?

Business Asset Rollover Relief allows taxpayers to delay paying Capital Gains Tax (CGT) on gains when they sell or dispose of certain assets and use all or part of the proceeds to buy new assets. The relief means that the CGT due on the gain of the old asset is postponed. The amount of the gain is effectively rolled over into the cost of the new asset and any CGT liability is deferred until the new asset is sold.

Where only part of the proceeds from the sale of the old asset is used to buy a new asset a partial rollover claim can be made. It is also possible to claim for provisional rollover relief where you expect to buy new assets but haven’t done so yet. Interestingly, rollover relief can also be claimed if you use the proceeds from the sale of the old asset to improve assets you already own. The total amount of rollover relief is dependent on the total amount reinvested to purchase new assets.

There are qualifying conditions to be met to ensure entitlement to any relief. These include ensuring that you purchase the new assets within 3 years of selling or disposing of the old ones (or up to one year before). Under certain circumstances, HMRC has the discretion to extend these time limits. In addition, both the old and new assets must be used by your business and the business must be trading when you sell the old assets and buy the new ones.

Planning note

It may be more beneficial to claim entrepreneurs’ relief (if eligible) and pay the CGT due at the lower 10% rate at the time of the disposal of the old asset.

Planning for significant CGT disposals is recommended and we would be happy to help advise you on the best course of action to take.

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Spousal tax reliefs for unmarried couples?

In a unanimous decision, the Supreme Court has decided that the law preventing opposite sex couples from entering into a civil partnership breaches the European Convention on Human Rights (ECHR). The appellants in this long running case are an opposite sex couple with a conscientious objection to marriage.

The crux of this case centred on the issue that when the law was changed in 2013 to allow same-sex couples to marry the older civil partnership rules remained the same. This meant that only two people of the same sex could enter into a civil partnership whilst both same-sex and opposite sex couples could both choose to marry. This created a new inequality affecting opposite sex couples, who for whatever reason, would prefer to enter into a civil partnership rather than marry. Interestingly both the High Court and Court of Appeal had already dismissed the couples claims of discrimination.

Although the couple have won their case, it remains to be seen exactly how the government will remedy this inequality. This may take some time and we are likely to see the eventual widening of the civil partnership rules that will allow all unmarried couples to benefit. The civil partnership rules effectively provide for the same tax reliefs as for married couples together with many other legal protections.

Cohabiting (same-sex and opposite sex) couples currently have limited legal rights and they should carefully consider their position especially when purchasing property together or building a family.

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