Directors’ briefing – January 2014
Tax implications for home owners
After MPs got caught ‘flipping’ their homes for a CGT (Capital Gains Tax) advantage, it must have grated. Chancellor George Osborne announced two important changes to the CGT treatment of homes in his Autumn Statement last month. From April 2015, CGT will be payable by non-resident sellers of UK residential property on gains in value arising after that date. Detail will need to follow because there would seem to be discrimination if UK resident owners continue to have to pay tax on gains arising before that date. The other major change is the shortening of the period for which you can claim CGT relief on the sale of a main home once you have moved out or bought your replacement home. That period shortens from three years to one-and-a-half for sales after April 2014. In both scenarios, we recommend an earlier sale or other form of transfer.
For tax or estate planning advice, please contact James McNeile at [email protected].
A recent spate of high-profile cases being undermined by careless tweeting has prompted the Attorney General to extend media advisory notes to all social media users. The historic move is intended to reduce the risk of users inadvertently prejudicing court proceedings by giving them clear guidance on what is and is not acceptable for publication. The move has important consequences for company directors whose employees have free reign to broadcast on social media sites in the company’s name. If your employees are using a company account or use personal accounts which are affiliated to the company on sites such as Twitter or Facebook, robust policies and training should be put in place to ensure that users know how to refer to the notes so that the company, and its directors, are not exposed to contempt of court actions.
Further information is available from Philip Banks-Welsh at [email protected].
Beware the DIY approach to lease negotiations
While it may be tempting for directors to negotiate a lease on new business premises themselves, we would urge them to get independent professional advice before they sign on the dotted line. We know that moving is expensive but the cost of not fully understanding the implications of what you’re signing up to are often far greater.
Commercial leases can be a minefield and there are numerous points to consider. One of the most important is that under a full repairing lease, a tenant will be responsible for repairing and maintaining the building regardless of the condition it is in when it is acquired. It is common for a lease to require a tenant to redecorate and undertake substantial repairs to the property at the end of the lease which can be incredibly costly.
For advice on any property-related issue please contact Greg Callard at [email protected].
Remember to follow due process when buying back shares
With many balance sheets looking healthier as the recovery takes hold, some companies are taking the opportunity to buy back shares from their shareholders. Motivations vary but it is often seen as a way to increase earnings per share and to extricate unwanted shareholders without the remaining shareholders having to purchase the shares themselves. It is essential for directors to remember that this is a technical process with many hoops that need to be jumped through. Various declarations need to be made by the directors regarding the financials of the company and stamp duty may be payable. Failure to follow the steps correctly can have serious ramifications for the company and the directors.
For information on any corporate issue, please contact Rishi Ladwa at [email protected].
Do I have to provide a reference?
Employers are often asked to provide references for former employees. Generally, there is no legal obligation on an employer to do this and you are entitled to refuse. However, your policy on references must be consistent or it could lead to allegations of discrimination. A corporate reference can be given but the employer will still be legally responsible for the contents. A manager may also give a reference in his or her personal capacity but it must be clear that it is not being given on behalf of the business. Advise managers not to use headed notepaper or include their job title, to avoid any confusion.
For advice on any employment matter, please contact Malcolm Gregory at [email protected].