Tax Avoidance Schemes

Yes, although HMRC often likes to confuse it with Tax Evasion which is a criminal offence.

• Gifting some of your assets to a son or daughter or grandchild with the intention that if you survive for a further seven years inheritance tax will be avoided on those assets when you die;
• Purchasing a piece of business property along with an expensive residence in order to ensure that the top rate of stamp duty is 5% rather than 15% or 17%;
• Planning to run a wedding reception venue in the grounds of a newly purchased country house bought by a company in order to avoid the 15% rate of stamp duty normally charged on purchases by companies of dwellings for more than £500,000.

Yes of course but you must ensure that you do so in ways that are legal and do not involve breaking the law or behaving dishonestly.

Tax avoidance is carrying out a transaction in a way that Parliament intended you to save tax e.g. investing in an ISA account in order to save income and capital gains tax. Tax evasion involves a breach of the law and usually dishonesty such as suppressing taxable income or claiming VAT on invoices that are false and have been generated in order to claim an input tax deduction.

The penalties for failure to pay the tax due normally involve a cash fine the amount of which varies according to whether you were merely careless or whether you were “deliberate” i.e. you knew that the entry on your tax return was incorrect. In more serious cases where a tax evader is prosecuted then the offender risks a prison sentence.