The maximum capital gains tax (CGT) saving on a gain of £1m with the current rate of business asset disposal relief (BADR) of 14% (for 2025/26) is £100,000. When the rate increases to 18% from 6 April 2026, the maximum saving reduces to £60,000. Then and Now… Take the situation of a private trading company owned 50:50 […]
Going, Going, Almost Gone! What is Left of BADR? Read More »
Many small businesses will start out as sole traders – the owner and the business are one and the same. Personal and business assets are kept apart only by a set of accounts and a balance sheet; and for tax purposes, the sole trader is taxed on the profit, not withdrawals. In effect, they are the business.
To Incorporate or Not to Incorporate – That is The Question! Read More »
As well as being the two certainties in life, death and taxes often go hand in hand. This article highlights how they interact in certain instances. Tax-Free Uplift There is no capital gains tax (CGT) on death. Assets owned at the time of death are uplifted to market value, ‘washing out’ any gains generated during one’s
A ‘Deadly’ Combination! Death and Taxes Read More »
People are sometimes surprised that they can trigger capital gains tax (CGT) if they gift an asset or sell it at undervalue. Unfortunately, that is what the tax law requires. Suppose that I have a piece of art worth £30,000 and I gift that to my cousin. I am treated as if I sold it for
Transfers of assets between spouses who are living together are treated as taking place at neither a gain nor a loss for capital gains tax (CGT) purposes under TCGA 1992, s 58. Where the asset transferred is a property which at some point has also been occupied as the only or main residence of one
PPR Relief: Transfers Between Spouses Read More »
While income tax applies to most sources of income, capital gains tax (CGT) applies to profits on the sale or disposal of an asset that has increased in value since its acquisition. However, some assets are exempt (e.g., a person’s only or main residence) while others (e.g., business assets) enjoy specific reliefs. Chattels and wasting
Chattels: Taxable or Exempt? Read More »
Trusts are formed when the legal ownership of an asset is separated from the beneficial ownership, i.e., a legal owner (the trustee) holds it ‘on trust’ for another person (the beneficiary) who benefits from it. The person who establishes the trust is the ‘settlor’. These trusts are known as ‘express trusts’, i.e., those deliberately created
Trusts: The Basics Read More »
Most readers will be aware that capital expenditure cannot be offset as an expense against income. There is a huge body of case law concerned with the (sometimes fine) line to be drawn between capital and revenue expenditure. One of the founding principles was stated by Viscount Cave in Atherton v British Insulated and Helsby
CGT Expenditure: Section 38 Rules, Okay? Read More »
Trusts are often mis-trusted (excuse the pun!); they are seen as being vehicles of fraud, dodgy dealings and generally something to be avoided. Whilst they could indeed be used for such ends (just as limited companies and any other structure might), trusts are more often used as a perfectly innocuous means of holding assets for
Can You Put Your Trust in Trusts? Read More »
For many years, unlike normal rented properties, the rent from a furnished holiday letting (FHL) was treated as trading rather than investment income, which had several tax benefits. Broadly, a property could be treated as an FHL if, in each tax year, it was available for short-term letting for 210 days and was in fact,
All Change: Furnished Holiday Lettings Read More »
