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UK
Taxation (continued)
Fee protection insurance
The Inland Revenue has reiterated their view that premiums for fee protection policies are not an allowable deduction from schedule D, case I or II profits.
Termination payments, etc
Prior to the introduction of the Income Tax (Earnings and Pensions) Act 2003, the Inland practice was to treat s148 ICTA 88 as applying in priority to section 154.
It now accepts (as a result of advice taken during the writing of ITEPA) that, as a matter of law, s154 ICTA 88 (which applies to benefits) took precedence over 148 which relates to termination payments.
Cases affected are likely to be those where a benefit related to a change in the nature of employment and are thought to be small in number. Comments on the change of practice should be addressed to: Revenue Policy Personal Tax (Technical), Room 131, Sapphire House, 550 Streetsbrook Road, Solihull, West Midlands, B91 1QU, UK.
Stamp duty
Guidance on whether a property is a residential property for the purpose of the disadvantaged areas relief is given on the Inland Revenue Website.
ISAs and PEPs
Amending regulations are to be brought forward which will permit all UCITS to be accepted as qualifying investments for ISAs. Most will also be acceptable for PEPs. UCITS investments which would return at least 95% of the capital originally invested will be eligible for the cash component of ISAs and UCITS schemes while lower returns of the original capital can be used for PEPs and for the share component of ISAs.
Details have yet to be announced.
National insurance categorisation
of earners
New regulations have been introduced which replace the 1998 regulations with effect from 6 April 2003. The Inland Revenue has now set out its interpretation of the new regulations, and appear in Tax Bulletin issue 65 and can also be accessed on the Internet.
Some entertainers, whose earnings did not consist 'wholly or mainly of salary' have been wrongly categorised as employees in the period 17 July 1998 to 5 April 2003.
If so, the two-year time limit will be waived to allow repayments to be claimed for earlier periods.
Statutory instruments
New regulations in SI 1337/2003) which came into effect on 10 June 2003 amend the Social Security (Contributions) Regulations 2001 (SI 1004/2001) to bring them more into line with the income tax regulations.
The following further statutory instruments have been made: -
The Statutory Maternity Pay (compensation of employers) Amendment Regulations 2003 (SI 672/2003).
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The Employment Act 2002 (Commencement No.2) Order 2003. (SI 2256/2003).
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The Employment Act 2002 (commencement No.2 and Transitional and Saving Provisions) Order 2003 (SI 2866/2003).
Minor benefit regulations
Following the advent of the Income Tax (Earnings and Pensions) Act 2003 new regulations entitled the Income Tax (Exemption of Minor Benefits (Amendments) Regulations) have been made by SI 1434/2003, which are effective from 25 June 2003.
Tax credit regulations
The Tax Credits (Employer Penalty Appeals) Regulations 2003 (SI 1382/2003) have been made.
These modify the appeals procedure which, as far as employer penalties are concerned, will now be to an appeal tribunal and not the general or special commissioners.
Criminal Justice and Police Act 2001-
Commencement Regulations (SI 708/ 2003)
The following provisions of the Criminal Justice and Police Act 2001 came into force on 1 April 2003.
(a) Sections 50 to 63
(b) Section 64(1), save for the words 'subject to subsection (2)'
(c) Sections 65 to 70
(d) Section 73
(e) Section 74
(f) Section 78(2)
(g) Section 79
(h) Section 80(1)
(i) Section 137 in so far as it relates to the entries in Schedule 7 referred to in point (m) below
(j) Schedule 1, save for paragraphs 35, 42 and 67
(k) Schedule 2 to the extent not already in force
(l) Schedule 5, and
(m) Schedule 7, Part 2 to the extent not already in force.
Rosser v IRC
The case concerned a claim for agricultural relief for IHT purposes for a house and barn.
Two acres of land attached to the house and the barn was surrounded by 41 acres. The Revenue had agreed that all of the land was agricultural land.
The house had been a farm house for many years, but the special commissioner held that it had ceased to be a farm house and become a retirement home for the deceased and her husband around the time that they ended their farming partnership.
The barn remained agricultural property, because throughout the period it was occupied for the purpose of agriculture in connection with the land.
Channel 5 TV Group Ltd v Merehead
In this case, a number of Channel 5 employees were given gratuitous payments by an overseas company which was an investor in Channel 5.
The special commissioners decided that the payments were not subject to National Insurance because they were gratuitous payments which were not made by the employer and were therefore exempted from National Insurance by regulation 19 (1) ( c) of the Social Security Contributions regulations 1979.
They further held that the 2001 regulations were consolidating regulations and therefore did not change the meaning. | 
