Elysium Law’s Post

We took counsels opinion on this point in June which informed the way we have been approaching HMRC.    Counsel’s view is that following the precedent in case law where a mistake is a mistake about the tax consequences of a transaction, the court may refuse relief if the claimants accepted the risk that the scheme would fail, or on the grounds of public policy.   Recent cases have gone against the taxpayer and the reasoning the court gave was that the taxpayers in those cases had made a deliberate decision to implement the scheme. The Court of Appeal also found that a mistaken belief as to the honesty of the adviser is not the type of mistake that warrants setting aside. In addition, the High Court found in a subsequent case that the fact the taxpayer went ahead despite the fact he did not understand the scheme and chose not to consider the documents or obtain further advice also demonstrated a ‘cavalier attitude to risk’. Counsel assessed the chances of setting aside the trusts on the grounds of mistake as below 50% and a claim for negligence may be uneconomical to pursue. As we have said from the beginning, affected taxpayers need to engage with professionals that are qualified to help who can then open up a dialogue with HMRC. Spotlight 63 was issued over a year ago now, this matter will not go away. #lesstaxforlandlords #LT4L #Property118 #P118 #Landlords #Incorpoations

We took counsels opinion on this point in June which informed the way we have been approaching our clients cases with HMRC. Counsel’s view is that following the precedent in case law where a mistake is a mistake about the tax consequences of a transaction, the court may refuse relief if the claimants accepted the risk that the scheme would fail, or on the grounds of public policy. Recent cases have gone against the taxpayer and the reasoning the court gave was that the taxpayers in those cases had made a deliberate decision to implement the scheme. The Court of Appeal also found that a mistaken belief as to the honesty of the adviser is not the type of mistake that warrants setting aside. In addition, the High Court found in a subsequent case that the fact the taxpayer went ahead despite the fact he did not understand the schemes and chose not to consider the documents or obtain further advice also demonstrated a ‘cavalier attitude to risk’. Counsel assessed the chances of setting aside the trusts on the grounds of mistake as below 50% and a claim for negligence may be uneconomical to pursue. We also stated back in June, that in our opinion, the letter of trust was valid. This also now confirmed by HMRC Solicitors Office. #taxlaw #bellhowleyperrotton #lesstax4landlords #hmrc #spotlight63

MISTAKE AND THE UNINTENDED TAX CONSEQUENCES In our latest article, Richard Gray Barrister considers the significant CGT assessments faced by taxpayers due to the Trust document used by Property 118 and Cotswold Barristers. HMRC's position is that incorporation relief under Section 162 of the Taxation of Chargeable Gains Act 1992 is not available because of a revocation clause in the Trust deed, resulting in unintended tax liabilities for many landlords. These unexpected tax consequences might give rise to professional negligence claims. However, losses must be mitigated first and one option is applying to the Court to set aside the arrangements based on the equitable doctrine of mistake. Read more on our website: https://lnkd.in/eSYBZfiW . . . . #ElysiumLaw #tax #hmrc #cgt #property118 #landlords

Attention Property 118 Clients: Facing Unintended Tax Consequences? If you're facing unexpected CGT assessments due to Property 118 or Cotswold Barristers' schemes, you might have recourse through the equitable doctrine of mistake. If you're interested, read more from my colleague Richard Gray Barrister and contact us at Elysium Law

The tax tribunal has found HMRC’s approach on R&D tax credits penalties to be unreasonable! The taxpayer’s appeal against R&D careless penalty was upheld. The tribunal judge in H&H Scaffolding limited TC09082 stated on 16/02/24:- ➡️Ordinarily it is for the Respondents to prove a careless inaccuracy, not for the Appellant to establish a "reasonable excuse”. ➡️The Tribunal does not accept the Respondents' case that where the taxpayer cannot show that it qualified for a given relief then it follows that the taxpayer will have been careless. ➡️ Since that would entail the mere existence of an inaccuracy determining that the same inaccuracy was careless. ➡️[Even if the agent] Legal Rooms" was careless, the Tribunal finds that the Appellant has proved on the balance of probabilities that it took reasonable care to avoid an inaccuracy. ➡️The Appeal is therefore allowed on the basis that the inaccuracy was not a careless one. The Tribunal does not need to determine whether the penalty should have been suspended. ➡️In this case, there were no further questions as I have seen on other cases centred on the R&D tax agents. ➡️HMRC tends to lose sight that it is the behaviour of the taxpayer that is being looked at not the behaviour of the R&D agent. ➡️As the tribunal judge pointed out in H&H Scaffolding Ltd, the onus is on HMRC to prove the behaviour is careless not for the taxpayer to provide a reasonable excuse. ➡️The tribunal judge found the taxpayer took reasonable care so the suspended conditions for a penalty was not even considered. ➡️This is a first tier tax tribunal decision so HMRC will say it’s not legally binding, but I find it difficult to see how HMRC can challenge the decision and take it upper tribunal on a legal point. The tribunal judges’s decision is legally sound. #hmrc #accountants #tax #randtaxcredits

As an extension of the national litigation policy – intending to curb litigation initiated at the instance of Government departments – the revenue departments have been issuing instructions to the field formations not to pursue cases involving low tax incidence. These instructions – colloquially referred as ‘monetary limit instructions’ – carry statutory force and are essentially de minimus limits for tax litigation, intended to relieve small disputes such that the government resources can be gainfully employed in significant tax disputes. Recently the GST department has issued its monetary limit instructions. However, a review of the fine print reveals that the exceptions enumerated therein are such wide and pervasive that it is doubtful if they will be able to obviate small tax disputes. Pleased to share publication of my reflections on SCC Online https://lnkd.in/gGqdMffj #taxlitigation #monetarypolicy #NationalLitigationPolicy #RevenueLitigation #tax #taxlaw #taxlaws #taxlawyer

The Town of Cheektowaga and its Tax Assessors properly adopted its tentative tax roll according to the New York State Supreme Court. In Borek v. Town of Cheektowaga, et al. and Kowalski v. Town of Cheektowaga, et al., the Court rejected class action theories of liability against the Town defendants claiming the Town utilized improper methodology to calculate and create the 2023 tentative tax assessment roll. A Hodgson Russ litigation team led by Daniel Spitzer, Emanuela (Amy) D'Ambrogio, and Emily Florczak secured the victory for the Town. The plaintiffs alleged the methodology used to calculate the 2023 assessment roll improperly calculated each property’s full market value, resulting in the improper calculation of all assessed values. The plaintiffs requested class action relief to overturn the tax roll and raised due process and equal protection challenges. In addition, plaintiffs requested an injunction to enjoin the Town from calculating its tax bills. The Town defendants moved to dismiss both actions in their entirety on the basis that the action is not ripe for judicial review, as there is no finality to a tentative tax assessment roll which is subject to challenge and further change. Further, the Town submitted countless records and guidance on tax assessment methodologies, which explained the process for calculating real property tax assessments in accordance with New York Real Property Tax Law (“RPTL”) and its interpreting guidance from the New York Office of Real Property Tax Services (“ORPTS”). The guidance demonstrated the methodology utilized by the Assessor was substantively proper. After extensive briefing, oral argument, post-argument submissions and a second post-argument hearing with the Court, the Court granted the Town defendants’ motions to dismiss with prejudice. It found the methodology used to calculate the tentative assessment roll was substantively and procedurally proper, and plaintiffs failed to evidence its unlawfulness. The decision confirms the significant range of discretion afforded Assessors in applying RPTL and ORPTS approved methodologies and deference to their determinations. #RPTL #ORPTS #RealPropertyTax #taxassessor #litigation

My latest thoughts on the assessing of a tenant for the tax liability of their landlord: "Assessing the taxpayer does nothing to promote compliance among non-resident landlords and ultimately our tax system is based on voluntary compliance and the CRA has the obligation to promote that through its compliance activities. https://lnkd.in/ewbFH6ZB

The Los Angeles mansion tax isn't working because there are work arounds. Always remember people who are paying the taxes are always smarter that the people who are making the tax laws. Check out this article on nine ways to avoid the ULA tax. I personally like the one where you divide the property up in to smaller parcels and sell them to them individually to one person. My second is have the husband and wife own parts separately. Let me know which is the best in your opinion. https://lnkd.in/gXRdUFsP

Victoria's new tax regime to ‘significantly impact' commercial property: The new commercial and industry property tax is a complex regime that will impact cash flow and returns, a specialist law firm cautions. https://bit.ly/4b1vRYs