I prepare LLP accounts for a partnership consisting of a husband and wife who run a small business.
For this example let's say I charge £2,000+VAT for LLP accounts / partnership tax return, and £250+VAT per personal tax return to report the share of partnership profits.
Can the personal tax return fee be claimed if the only requirement for preparing one is to report partnership profits?
In order for an expense to be allowable as a revenue deduction for tax purposes, it must be an expense of the partnership and it must be incurred wholly and exclusively for the purposes of the partnership’s business (s34 ITTOIA 2005).
I cannot see how the cost of the personal tax returns are a business cost that is wholly and exclusively incurred for the purposes of the business. They may be incurred as a consequence of having the business, but the purpose that it has been incurred is to satisfy the personal compliance of the taxpayer and not for the purposes of the partnership business.
Please see HMRC manual PM163350 for some guidance.
We prepare service charge accounts for a number of clients.
A group of leaseholders of a block of flats (i.e. 20 units) have grouped together to buy the Freehold of the building they own flats in.
They are buying the freehold via a Limited Company for a consideration of £140,000 in total.
Is there likely to be stamp duty on this purchase?
On the basis that the freehold is being acquired by a company for a consideration of £140,000, this will constitute a chargeable land transaction for SDLT purposes.
Where a transaction consists solely of residential property, the SDLT treatment depends on the number of dwellings acquired. Where six or more dwellings are acquired in a single transaction the acquisition can be treated as non‑residential for SDLT purposes.
Accordingly, if the freehold acquisition relates to six or more self‑contained dwellings, the transaction would be treated as non‑residential and SDLT would be calculated using the non‑residential rates. As the non‑residential nil‑rate threshold is £150,000, no SDLT would be payable on a purchase price of £140,000, although an SDLT return would still be required.
However, if fewer than six dwellings are included, the transaction would be treated as residential for SDLT purposes, and the residential rates (including the higher rates surcharge, where applicable) would need to be considered.
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