People that own a second property always ask me for ways to reduce their potential tax liability if they were to sell it. Here are a few useful tips.
If you own a second property you could be liable to pay capital gains tax on the sale of this asset at the rate of 18 or 28%.
I advise my clients with ways to reduce the potential tax liability on the sale significantly which sometimes results in the client having to pay no tax.
There are reliefs available such as lettings relief which if structured properly exempts the first £40,000 of gain, if your partner is named on the property he/she will be entitled to an additional £40,000 exemption as well. There is also the 36 month rule of deemed occupation which you pro rata the time period in which you own the property and thus final 3 years could be exempt. As well as a few others.
There are some real generous reliefs out there, however in order to obtain them you need to make sure that the second property was at some point your principle private residence and it has been subsequently rented out.
The tip is when you buy a second property make sure you move into it and live there for a decent amount of time. Then you will qualify for these generous reliefs and potentially save thousands of pounds.
The reliefs are complicated to work out and you will need to speak with a Tax advisor. If you or your clients own more than one property I can help you save money.
A good referral for me today would be anyone you know who has a rental property, I can help manage the accounts as well as structure a way to save tax
Contact me for further info mitch@ljd.uk.com
Wednesday, 28 September 2011
Monday, 26 September 2011
Planning on purchasing equipment for your business? Do it now !
There are substantial reliefs available for organisations that spend money on various items of equipment. These are generally known as Capital Allowances.
Capital Allowances are available to sole traders, self-employed persons or partnerships, as well as companies and organisations liable for Corporation Tax.
The current capital allowance regime is to be changed from April 2012 to pay for future cuts in corporation tax.
The Annual investment allowance is an allowance where Businesses can claim for capital expenditure incurred on most items of plant and machinery , including .integral features. (but not business cars), up to a maximum of 100% relief. From April 2012, the allowance currently at £100,000 is scheduled to fall to £25,000.
Businesses can significantly reduce the cost of investing in new assets before the reduced allowances take effect.
So if you have plans to invest in your business next year you may want to think about pushing forward the expenditure to this tax year to maximise your allowances.
This week I am looking to speak with Directors of new start up companies
Mitch Young from Lerman Jacobs Davis helping you and your business to count!
mitch@ljd.uk.com
Capital Allowances are available to sole traders, self-employed persons or partnerships, as well as companies and organisations liable for Corporation Tax.
The current capital allowance regime is to be changed from April 2012 to pay for future cuts in corporation tax.
The Annual investment allowance is an allowance where Businesses can claim for capital expenditure incurred on most items of plant and machinery , including .integral features. (but not business cars), up to a maximum of 100% relief. From April 2012, the allowance currently at £100,000 is scheduled to fall to £25,000.
Businesses can significantly reduce the cost of investing in new assets before the reduced allowances take effect.
So if you have plans to invest in your business next year you may want to think about pushing forward the expenditure to this tax year to maximise your allowances.
This week I am looking to speak with Directors of new start up companies
Mitch Young from Lerman Jacobs Davis helping you and your business to count!
mitch@ljd.uk.com
Friday, 23 September 2011
Be aware of false emails from HMRC !
Have you recieved an email from HMRC about a refund of tax?
HMRC has issued a warning over fraudulent emails, as reports of phishing emails have risen by 300 per cent in the last year.
The emails, which claim to be from HMRC, encourage the recipient to click through to a replica of the HMRC website. The website then asks for their credit card or debit card details, enabling the criminals to access their accounts.
Almost 24,000 of these emails were reported to HMRC in August, an increase of 300 per cent compared to the same month last year. As a result, HMRC is currently helping to get around 100 scam websites shut down each month.
If you have recieved one of these emails please delete them asap. HMRC never communicate via emails with regards to refunds.
Alternatively get in touch with me and I will let contact HMRC for you
Have a great weekend
mitch@ljd.uk.com
HMRC has issued a warning over fraudulent emails, as reports of phishing emails have risen by 300 per cent in the last year.
The emails, which claim to be from HMRC, encourage the recipient to click through to a replica of the HMRC website. The website then asks for their credit card or debit card details, enabling the criminals to access their accounts.
Almost 24,000 of these emails were reported to HMRC in August, an increase of 300 per cent compared to the same month last year. As a result, HMRC is currently helping to get around 100 scam websites shut down each month.
If you have recieved one of these emails please delete them asap. HMRC never communicate via emails with regards to refunds.
Alternatively get in touch with me and I will let contact HMRC for you
Have a great weekend
mitch@ljd.uk.com
Wednesday, 21 September 2011
Are you getting full tax relief on your pension contributions?
Here is one for you to think about.
Do you contribute to a pension either for yourself or your staff?
Where an employer has set up a stakeholder or similar pension scheme for their staff and an employee who is a higher rate tax is contributing to the scheme, the employee will not automatically get higher rate relief for their contributions and will need to make a claim for this relief on a tax return. This is a common situation which is often not known.
You could be contributing to your employer pension scheme thinking you are getting full relief but actually you are not making the most of it. Go away and speak to your HR Department or direct to your pension company to find out which scheme you are on.
At Ljd we can advise people whether they are getting full relief for their pension contributions and if not make the appropriate claims on the self assessment tax returns.
Please do not hesitate to get in touch for further guidance mitch@ljd.uk.com
Mitch Young from Lerman Jacobs Davis helping you and your business to count!
Do you contribute to a pension either for yourself or your staff?
Where an employer has set up a stakeholder or similar pension scheme for their staff and an employee who is a higher rate tax is contributing to the scheme, the employee will not automatically get higher rate relief for their contributions and will need to make a claim for this relief on a tax return. This is a common situation which is often not known.
You could be contributing to your employer pension scheme thinking you are getting full relief but actually you are not making the most of it. Go away and speak to your HR Department or direct to your pension company to find out which scheme you are on.
At Ljd we can advise people whether they are getting full relief for their pension contributions and if not make the appropriate claims on the self assessment tax returns.
Please do not hesitate to get in touch for further guidance mitch@ljd.uk.com
Mitch Young from Lerman Jacobs Davis helping you and your business to count!
Tuesday, 20 September 2011
Is your company being smart by giving you a phone?
Do you have a smart phone that has been paid for by your company or the company you work for?
I have been speaking with a client this week about the provision of phones to employees and the tax implications.
It is a little known fact that whilst provisions of mobile phones are an exempt benefit, this exemption does not apply to Blackberries, Iphones and other smart phones.
Such devices are therefore taxed in the same way as computers and will be taxable unless personal use is insignificant.
Moreover businesses need to have a policy in place to state that employees must keep personal usage to a minimum to avoid tax and reporting implications
Go away and check whether your company has a policy in place otherwise you could face a large taxable benefit at the end of the year.
Feel free to contact me for further advice
Mitch Young from Lerman Jacobs Davis, helping you and your business to count !!
I have been speaking with a client this week about the provision of phones to employees and the tax implications.
It is a little known fact that whilst provisions of mobile phones are an exempt benefit, this exemption does not apply to Blackberries, Iphones and other smart phones.
Such devices are therefore taxed in the same way as computers and will be taxable unless personal use is insignificant.
Moreover businesses need to have a policy in place to state that employees must keep personal usage to a minimum to avoid tax and reporting implications
Go away and check whether your company has a policy in place otherwise you could face a large taxable benefit at the end of the year.
Feel free to contact me for further advice
Mitch Young from Lerman Jacobs Davis, helping you and your business to count !!
Thursday, 14 April 2011
Happy New Year !
Last week marked the beginning of the new tax year and some significant changes to the tax system.
Many of the changes have been introduced as a way of helping with the Government's efforts at budget deficit reduction.
Among many changes, one of the biggest differences people will experience is in income tax. As from 6 April, the personal allowance, which marks the point at which income tax becomes payable, rises by £1,000 to £7,475.
However, the threshold at which higher earners become liable for the 40 per cent tax rate falls to £42,475.
The employee national insurance contribution for those who qualify climbs from 11 per cent to 12 per cent.
Anyone who pays NI over the upper earnings limit sees their charge rise by 2 per cent.
A land tax stamp duty rate of 5 per cent is to be charged on residential property transactions worth more than £1 million.
Pension contributions that are entitled to tax relief now have an allowance of £50,000, down from the previous figure of £225,000.
There is no longer a requirement to purchase a pension annuity by the age of 75.
Now is the time to consider your own tax situation. Why not drop me an email and arrange a free meeting?
mitch@ljd.uk.com
Many of the changes have been introduced as a way of helping with the Government's efforts at budget deficit reduction.
Among many changes, one of the biggest differences people will experience is in income tax. As from 6 April, the personal allowance, which marks the point at which income tax becomes payable, rises by £1,000 to £7,475.
However, the threshold at which higher earners become liable for the 40 per cent tax rate falls to £42,475.
The employee national insurance contribution for those who qualify climbs from 11 per cent to 12 per cent.
Anyone who pays NI over the upper earnings limit sees their charge rise by 2 per cent.
A land tax stamp duty rate of 5 per cent is to be charged on residential property transactions worth more than £1 million.
Pension contributions that are entitled to tax relief now have an allowance of £50,000, down from the previous figure of £225,000.
There is no longer a requirement to purchase a pension annuity by the age of 75.
Now is the time to consider your own tax situation. Why not drop me an email and arrange a free meeting?
mitch@ljd.uk.com
Friday, 1 April 2011
Paying The Penalty
GET YOUR TAX RETURN IN EARLY THIS YEAR !
I say it every year but this coming tax year it may be more important than ever to get your tax return submitted before the deadline because HMRC have just announced the new penalty regime.
Where as in the past if you submitted a tax return late you would be subject to £100 fine and then have a month to pay outstanding tax before a 5% surcharge. Now from this year the old fine of £100 is to be replaced because, the tax authority says, the previous penalty rate was not enough of a deterrent. The new penalty regime for late filing and late payment of self assessment income tax starts in April 2011 and applies to the tax year 2010/11.
Taxpayers who fill in self assessment tax returns will shortly receive their 2010/11 notices and paper returns. These will include information on the new penalty framework and how it will significantly increase penalties for those who file and pay late. A tax return filed six months late could attract a penalty of at least £1,300.
HMRC's Stephen Banyard said: "The vast majority of people don't have to pay penalties because they send in their return and pay on time. But there are always a small number of people who have avoided filing or paying on time. HMRC spends a lot of time pursuing late returns and getting involved in unnecessary appeals work.
The new penalty regime does not look nice.
One day late will mean an initial penalty of £100, even if there is no tax to pay or all the tax owed has been paid.
Three months late will mean an automatic daily penalty of £10 per day, up to a maximum of £900.
Six months late will mean further penalties, which are the greater of 5 per cent of tax due or £300.
Twelve months late will mean yet more penalties, which are the greatest of 5 per cent of tax due or £300. In serious cases, there could be a higher penalty of up to 100 per cent of the tax due.
Penalties for late payment of tax are:
Thirty days late will involve an initial penalty of 5 per cent of the tax unpaid at that date.
Six months late will involve a further penalty of 5 per cent of the tax that is still unpaid.
Twelve months late will involve a further penalty of 5 per cent of the tax that is still unpaid.
I suggest gather all your information in April and get it to your accountant so they have plenty of time to complete your return. Not only will you guarantee your return being filed on time, you can also plan your tax payments. Act now !
If you need help with your tax return please do not hesitate to contact me mitch@ljd.uk.com
I say it every year but this coming tax year it may be more important than ever to get your tax return submitted before the deadline because HMRC have just announced the new penalty regime.
Where as in the past if you submitted a tax return late you would be subject to £100 fine and then have a month to pay outstanding tax before a 5% surcharge. Now from this year the old fine of £100 is to be replaced because, the tax authority says, the previous penalty rate was not enough of a deterrent. The new penalty regime for late filing and late payment of self assessment income tax starts in April 2011 and applies to the tax year 2010/11.
Taxpayers who fill in self assessment tax returns will shortly receive their 2010/11 notices and paper returns. These will include information on the new penalty framework and how it will significantly increase penalties for those who file and pay late. A tax return filed six months late could attract a penalty of at least £1,300.
HMRC's Stephen Banyard said: "The vast majority of people don't have to pay penalties because they send in their return and pay on time. But there are always a small number of people who have avoided filing or paying on time. HMRC spends a lot of time pursuing late returns and getting involved in unnecessary appeals work.
The new penalty regime does not look nice.
One day late will mean an initial penalty of £100, even if there is no tax to pay or all the tax owed has been paid.
Three months late will mean an automatic daily penalty of £10 per day, up to a maximum of £900.
Six months late will mean further penalties, which are the greater of 5 per cent of tax due or £300.
Twelve months late will mean yet more penalties, which are the greatest of 5 per cent of tax due or £300. In serious cases, there could be a higher penalty of up to 100 per cent of the tax due.
Penalties for late payment of tax are:
Thirty days late will involve an initial penalty of 5 per cent of the tax unpaid at that date.
Six months late will involve a further penalty of 5 per cent of the tax that is still unpaid.
Twelve months late will involve a further penalty of 5 per cent of the tax that is still unpaid.
I suggest gather all your information in April and get it to your accountant so they have plenty of time to complete your return. Not only will you guarantee your return being filed on time, you can also plan your tax payments. Act now !
If you need help with your tax return please do not hesitate to contact me mitch@ljd.uk.com
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