Inheritance tax and capital gains tax are big issues in 2018
The Convener of the Private Client Committee and Tax Board member, Angela Haig CA, discusses how a close working relationship with HMRC is beneficial for private client work, and highlights the biggest issues of 2018.
What are the fundamental differences between the Tax Board and the Private Client Committee (PCC)?
The many areas of tax are split amongst the various Committees to look after. The PCC reports on its work and activities to the Tax Board on a regular basis. The Tax Board sets the overall principles and objectives that ICAS wishes to achieve on behalf of members and the general public. The PCC uses those principles and objectives to steer its work.
What are the priorities for the PCC for 2018 and ahead?
These include monitoring the various consultation documents released by HMRC involving capital taxes such as Inheritance Tax (IHT) and Capital Gains Tax (CGT) and responding to these as appropriate.
We liaise with HMRC on a regular basis by attending meetings such as the Capital Taxes Liaison Group meeting, which allows HMRC and professionals to get together and discuss matters of importance to both. We will be providing input to the Office of Tax Simplification (OTS) and seeking members’ input on areas of concern.
What do you find useful about sitting on both the Board and the Committee?
I find the close relationships that ICAS has with HMRC and Treasury to be very useful in understanding the reasons for legislative changes. Being on the Board and the Committee means I am able to influence some of those changes on behalf of members.
The PCC has a representative from HMRC Capital Taxes attend a meeting in person once a year which gives us a great opportunity to ask very direct questions, although it doesn’t always get a direct answer! I find it keeps me up-to-date with proposed changes in legislation and enables me to be more proactive with my own clients.
What sort of issues do you see cropping up for private clients over 2018, and are they fundamentally different to the issues raised last year?
The main issues for private clients this year will be:
- increasing complexity of tax legislation with the recent introduction of the Residence Nil Rate Band for IHT and the impact on succession planning;
- changes to CGT on residential properties and the additional dwelling supplement for LBTT;
- proposals to change the CGT payment dates for residential property sales and increased administrative responsibilities such as the mandatory online Trust Registration.
A review of IHT by the OTS may result in further legislative changes.
What is your opinion on the introduction of Scottish income tax as it relates to private client work?
The SRIT will only add more complexity to a tax system that is already in need of simplification. It will lead to errors in compliance and is likely to take up more of HMRC’s limited resource to administer on behalf of the Scottish Government.
I feel for the new students who will now have to be educated in two different tax systems. There is already so much to learn.
The tax changes could possibly affect people’s decision on where they are located in the UK for work if the differential in taxes is significant enough.
Why do you give up your time to volunteer with ICAS, and would you encourage other CAs to get involved?
I would encourage members to get involved with ICAS where possible, as it is important to be able to make representations to Government and influence the tax system of the future.
ICAS provides a voice of reason for members and the general public, and ensures HMRC and other relevant parties understand the implications of their decisions on taxation. More importantly, volunteering allows me to give something back to ICAS.
How does EQ Accountants support your work with ICAS?
It is important to support your professional body. EQ is very keen to support ICAS as it appreciates the support ICAS provides to EQ and other members and the exceptional training provided to our CA students.