One minute with Rob Durrant-Walker, Director at Crane Dale Tax.
What’s keeping you busy at work?
Employee Ownership Trusts and Family Investment Companies are keeping me particularly busy this year, together with the associated corporate restructures and property decisions which are sometimes needed to facilitate the best outcomes. I am also starting my writing schedule for the next few months for the various Tolley annuals and guidance to which I contribute.
What do you know now that you wish you’d known at the start of your career?
Don’t be afraid to admit that you don’t know or can’t remember, whether it’s to colleagues, clients or yourself. The adage that ‘the more you learn, the less you realise you can know’ is very true in tax. Having some humility and getting it right after checking is a professional strength; hubris isn’t.
If you could make one change to tax...
An aspect that is often relevant to OMB planning – and which I’ve seen cause problems a few this year – is that CGT Holdover Relief on gifts of shares is often misunderstood (practitioner side) and has a significant flaw (HMRC/Treasury side). This can create hurdles to passing on the family business tax-efficiently in some cases. Practitioners often forget the secondary restriction to relief for non-trading chargeable assets (TCGA 1992 Sch 7 para 7), which can be lethal to a claim. More fundamentally, the design of the relief hasn’t kept pace with the separation of chargeable/intangible asset treatment over the years. The fraction of trading/non-trading chargeable assets within the company to determine how much of a gift of shares is charged doesn’t factor in the value of intangibles in the business, such as post-2002 goodwill. This creates some perverse results where trade goodwill might be £20m, but where the only chargeable asset is a non-trading asset of £100,000 – result ‘misery’ as Charles Dickens would conclude, as the deemed gain on the shares can be fully charged even when the non-trading part of the business is only in reality a minute aspect. The CIOT made a representation to HMRC on this dichotomy in 2023 but didn’t get a response, and has recently nudged them again. As it stands, it creates some quite binary and artificial choices. At one extreme this might include evicting tenants to convert a buy-to-let into offices used in the trade. I would add, that was the client’s conclusion and happily in this case the tenants were offered better accommodation from another business of the client at a discount as an incentive to move. I cannot imagine what passionate words Billy Bragg might sing about the outcomes between rich and poor that tax sometimes brings.
Are there any new rules that are causing a particular problem in practice?
The proposed changes to Agricultural and Business Property Reliefs have become a headline factor in some of our work on business structure planning. Genuine farmers with farm value above the forthcoming £1m APR/BPR limit might have ten years to pay the IHT in instalments, but for many this still isn’t a realistic payment target when the land is making such poor farming returns (and supermarket pricing pressures don’t help them). Farms will be broken up to pay this, and below a certain size then they aren’t viable. I would love to see some considered change from the Government on this policy area. The NFU has proposed an exemption with clawback mechanism, for instance, as a better targeted alternative.
You might not know this about me but...
I live near Vancouver in western Canada. My working day starts at 6am (2pm UK). I try to time my UK visits to friends and family with seeing my favourite bands – which recently aligned gloriously with three consecutive nights seeing Panic Shack and Manic Street Preachers (twice).
One minute with Rob Durrant-Walker, Director at Crane Dale Tax.
What’s keeping you busy at work?
Employee Ownership Trusts and Family Investment Companies are keeping me particularly busy this year, together with the associated corporate restructures and property decisions which are sometimes needed to facilitate the best outcomes. I am also starting my writing schedule for the next few months for the various Tolley annuals and guidance to which I contribute.
What do you know now that you wish you’d known at the start of your career?
Don’t be afraid to admit that you don’t know or can’t remember, whether it’s to colleagues, clients or yourself. The adage that ‘the more you learn, the less you realise you can know’ is very true in tax. Having some humility and getting it right after checking is a professional strength; hubris isn’t.
If you could make one change to tax...
An aspect that is often relevant to OMB planning – and which I’ve seen cause problems a few this year – is that CGT Holdover Relief on gifts of shares is often misunderstood (practitioner side) and has a significant flaw (HMRC/Treasury side). This can create hurdles to passing on the family business tax-efficiently in some cases. Practitioners often forget the secondary restriction to relief for non-trading chargeable assets (TCGA 1992 Sch 7 para 7), which can be lethal to a claim. More fundamentally, the design of the relief hasn’t kept pace with the separation of chargeable/intangible asset treatment over the years. The fraction of trading/non-trading chargeable assets within the company to determine how much of a gift of shares is charged doesn’t factor in the value of intangibles in the business, such as post-2002 goodwill. This creates some perverse results where trade goodwill might be £20m, but where the only chargeable asset is a non-trading asset of £100,000 – result ‘misery’ as Charles Dickens would conclude, as the deemed gain on the shares can be fully charged even when the non-trading part of the business is only in reality a minute aspect. The CIOT made a representation to HMRC on this dichotomy in 2023 but didn’t get a response, and has recently nudged them again. As it stands, it creates some quite binary and artificial choices. At one extreme this might include evicting tenants to convert a buy-to-let into offices used in the trade. I would add, that was the client’s conclusion and happily in this case the tenants were offered better accommodation from another business of the client at a discount as an incentive to move. I cannot imagine what passionate words Billy Bragg might sing about the outcomes between rich and poor that tax sometimes brings.
Are there any new rules that are causing a particular problem in practice?
The proposed changes to Agricultural and Business Property Reliefs have become a headline factor in some of our work on business structure planning. Genuine farmers with farm value above the forthcoming £1m APR/BPR limit might have ten years to pay the IHT in instalments, but for many this still isn’t a realistic payment target when the land is making such poor farming returns (and supermarket pricing pressures don’t help them). Farms will be broken up to pay this, and below a certain size then they aren’t viable. I would love to see some considered change from the Government on this policy area. The NFU has proposed an exemption with clawback mechanism, for instance, as a better targeted alternative.
You might not know this about me but...
I live near Vancouver in western Canada. My working day starts at 6am (2pm UK). I try to time my UK visits to friends and family with seeing my favourite bands – which recently aligned gloriously with three consecutive nights seeing Panic Shack and Manic Street Preachers (twice).
