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March 2020 Questions and Answers

2020-03-10T12:48:43+00:00March 25th, 2020|Categories: Questions & Answers|Tags: , , |

Q. If I sell a buy-to-let property in July 2020, when will I have to pay the capital gains tax (CGT) arising on the sale? A. Finance Act 2019 made certain changes regarding payment of CGT, which take effect from April 2020 and broadly align the position of UK residents and non-UK residents. Subject to certain exceptions, where there has been a disposal of a residential property, payment on account of the CGT will be due on the filing date for the return, which is generally within 30 days of the day after the date the property sale is completed. [...]

February 2020 Questions and Answers

2020-02-11T22:24:29+00:00February 17th, 2020|Categories: Questions & Answers|Tags: , , , |

Q. What items can be excluded from ‘taxable turnover’ for VAT registration purposes? A. When the 'taxable turnover' of a business reaches the VAT registration threshold, currently £85,000 per annum, it must register for VAT. Income that is not counted as 'taxable turnover' is excluded from the £85,000 turnover figure. There are several items that can be ignored when calculating 'taxable turnover' for VAT registration purposes. Any income that is 'exempt' from VAT is ignored. This commonly includes insurance, postage stamps or services; and health services provided by doctors or dentists. - Some goods and services are outside the VAT [...]

January 2020 Questions and Answers

2020-01-03T12:01:06+00:00January 10th, 2020|Categories: Questions & Answers|Tags: , , , , |

Q. I am the sole director and shareholder of a limited company, which has been trading for many years. Last year, I took an extended holiday and travelled around the world with my wife. We were away for twelve months in total. Whilst I was away the company continued to collect outstanding payments, but it did not receive any other income. Now that I am back, I have taken on another director/shareholder (50%) and company trading has resumed. Should I have informed HMRC that I was going away and how should the losses in the period of temporary non-trading [...]

November Questions and Answers

2019-11-01T21:18:11+00:00November 11th, 2019|Categories: Questions & Answers|Tags: , , , , |

Q. I have recently started running my own business providing training services. HMRC have advised me that VAT is not charged on the type of services I am providing. Does this mean that my services are zero-rated for VAT or actually exempt? Do I need to register for VAT? A. Although both zero-rated and exempt supplies result in no VAT being applied to the supply, the consequence is very different between them and it is important to get it right. Zero-rating is a rate of VAT, albeit at zero per cent. The goods and/or services to which it applies are [...]

October Questions and Answers

2019-10-03T00:19:07+01:00October 23rd, 2019|Categories: Questions & Answers|Tags: , , |

Q. Our house has always been owned jointly by myself, my mother and my sister. My sister and I now want to buy our own homes and want to make mum the sole owner of our current home. If we put the house in her sole name will she have to pay capital gains tax (CGT) on it? A. Transferring the house into your mother's sole name will not trigger a liability to CGT, but it may have CGT implication for you and your sister. However, since you live in the property, it is quite likely that you would qualify [...]

September 2019 Questions and Answers

2019-09-16T17:36:46+01:00September 18th, 2019|Categories: Questions & Answers|Tags: , , , , , |

Q. I am a qualified chiropractor and I have been running my own business for many years. I would now like to specialise in a particular area and have enrolled on a university course to obtain the relevant qualification. The cost is around £18,000 per annum and the course is three years in duration, during which time I intend to continue working part-time. Is the cost of the course deductible for tax purposes? A. Expenditure incurred by the owner of a business on training courses for themselves is revenue expenditure if the course merely updates existing expertise or knowledge. Expenditure [...]

August questions and answers

2019-08-23T16:22:41+01:00August 6th, 2019|Categories: Questions & Answers|Tags: , , |

Q. A few years ago I bought an antique chair for £3,500. I have recently been offered £8,000 for it. Will I have to pay capital gains tax if I accept the offer? A. A useful capital gains tax exemption exists for tangible moveable property (a chattel) which is not a wasting asset (broadly, an asset with a predictable life not exceeding 50 years). A gain on disposal of a chattel is exempt if the disposal consideration is £6,000 or less. Where disposal proceeds exceed the exemption limit, the gain is limited using the following formula: 5/3 x (disposal consideration [...]

July Questions and Answers

2019-09-02T11:32:29+01:00July 23rd, 2019|Categories: Questions & Answers|Tags: , , , , , |

Q. If my husband and I give our house to my children but continue to live in it, will inheritance tax be chargeable on the property when we die? A. The inheritance tax residence nil rate band (RNRB), which is currently being phased, is designed to help people in your position to pass on the family home to children or grand- children, tax-free after their death. Broadly, where someone dies on or after 6 April 2017 and their estate is above the basic inheritance tax threshold (currently £325,000), the estate may be entitled to an additional threshold before any inheritance [...]

June 2019 questions and answers

2019-09-02T11:27:58+01:00June 24th, 2019|Categories: Questions & Answers|Tags: , , , , |

Q. If I take my staff away overnight for an off-site daytime business meeting and evening social function, will the costs be tax deductible for corporation tax purposes? A. The costs will be allowable for the company, but a benefit-in-kind will arise on the social aspect of the trip. It may be possible to obtain HMRC approval that the benefit falls within the exemption for annual parties and similar functions costing no more than £150 per attendee (if the £150 is exceeded, the whole amount is taxable as a benefit). You may wish to consider structuring the event to take [...]

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