I once heard someone say: “My house is for my retirement; my pension is for the kids.” They were broadly saying that, as pensions are not included in an individual’s inheritance tax (IHT) estate, it makes sense to spend taxable assets first – particularly the equity they had built up in their house – and
Bringing pensions into the IHT net: What’s the new strategy? Read More »
Chattels are tangible, movable personal property (e.g., art, antiques, jewellery and furniture). For capital gains tax (CGT) purposes, they are split into wasting chattels with a predictable life of 50 years or less, which are usually exempt and non-wasting chattels with a life of over 50 years, which are potentially taxable if sale proceeds exceed
CGT on chattels and wasting assets: What’s exempt? Read More »
When a business suffers a loss and makes an insurance claim, the insurance company will ask if the business is VAT registered. The normal position is that if the business is VAT registered, the insurance company pays net of the VAT. The business then claims the VAT element from HMRC on its next VAT return.
VAT and insurance claims Read More »
Certainly since COVID, it has become increasingly common for employees to work from home either permanently or as part of flexible working for employees; however, the self-employed will often use their homes as offices too. Costs of being at home For the self-employed, income tax relief can be claimed based on actual costs of maintaining
Use of home as office: Are you claiming? Read More »
Third time unlucky Individuals who file self-assessment returns are generally open to enquiries into their tax returns by HM Revenue and Customs (HMRC). In addition to those tax returns which are selected by HMRC for a particular reason (e.g., unexplained, significant decreases in self-employment income), a ‘very small proportion’ of tax returns are randomly selected
Helping all taxpayers on their way to living a tax-efficient life. Read More »
Within a death estate and an IHT400 account, the value of liabilities can generally be deducted when calculating the IHT liability (under IHTA 1984, s 5(5)). Debts which are allowable for inheritance tax (IHT) purposes have to be either debts imposed by law (tax being the most common, but also local taxes such as council
Loan deductions and IHT Read More »
For married couples and civil partners, one of the simplest and most effective tax planning tools is the ability to transfer assets between each other without triggering an immediate tax charge. Whichever tax is being considered, inter spouse transfers can lower a household’s overall tax bill. However, some important conditions apply (NB in this article,
How to reduce tax with inter-spouse transfers Read More »
Investment bonds are a tax-efficient way to hold investments, similar to other ‘wrappers’ (individual savings accounts, pensions, etc). With increasing capital gains tax (CGT) rates, they are worth considering – particularly for higher earners planning for retirement. Investment bonds are established with an insurance company and funded with a lump sum or regular cash contributions.
The name’s Bond – Investment bond! Read More »
Many people have excess yearly income, which can usefully be classed as gifts of income and as such can form excess ‘normal expenditure’ out of income within IHTA 1984, s 21(1). In effect, if it can be shown as an excess of income surplus to requirements for the usual standard of living and gifted, it
Give what you can afford IHT: Normal expenditure out of income Read More »
If a business is run from home or has an office at home, it is entitled to claim back the VAT on any legitimate business expenses. This means that if the business incurs extra costs in running the business from home, it can reclaim the VAT on those costs, as well as a proportion of
Running a business from home and reclaiming the VAT Read More »
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