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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

2019-07-05T22:31:40+01:00July 23rd, 2019|Categories: Questions & Answers|Tags: , , , , , |

July Questions and Answers 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 [...]

June 2019 questions and answers

2019-06-12T23:15:24+01:00June 24th, 2019|Categories: Questions & Answers|Tags: , , , , |

June Questions and Answers 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 [...]

May 2019 Questions and Answers

2019-04-27T22:08:28+01:00May 22nd, 2019|Categories: Questions & Answers|Tags: , , , , |

May Questions and Answers Q. I have realised that I made a mistake on my most recent VAT return. What do I need to do to put things right? A. You can make adjustments to correct errors on past returns if the error: - was below the reporting threshold (broadly, less than £10,000, or up to 1% of your box 6 figure (up to a maximum of £50,000); - was not deliberate; and - relates to an accounting period that ended less than 4 years ago. When you submit your next return, add the net value to box 1 [...]

March questions and answers

2019-02-27T18:27:20+01:00March 27th, 2019|Categories: Questions & Answers|Tags: , , , |

March Questions and Answers Q. My wife and I own various assets – some are held in individual names and others are held jointly. We are wondering whether we should 'equalise' the value of our assets so as reduce potential liability to capital gains tax at a future date. A. As a general rule, so-called 'equalisation of estates' is often desirable for both capital gains and inheritance tax purposes. Broadly, this means that ideally each spouse/civil partner should own assets: - amounting to at least the value of the inheritance tax (IHT) nil rate band (currently £325,000); - which, [...]

January 2019 Questions and Answers

2019-01-05T14:25:39+01:00January 24th, 2019|Categories: Questions & Answers|Tags: , , , , |

January Questions and Answers Q. What should I do about an error I accidently made on my latest VAT return? A. You can adjust your current VAT account to correct errors on past returns if the error: - was below the reporting threshold (in broad terms this is less than £10,000, or up to 1% of your box 6 figure (up to a maximum of £50,000); - was not deliberate; and - relates to an accounting period that ended less than 4 years ago. When you submit your next return, add the net value to box 1 for tax [...]

December Questions and Answers

2018-11-27T00:17:14+01:00December 15th, 2018|Categories: Questions & Answers|Tags: |

December Questions and Answers Q. I am aware that there is to be a temporary increase in the limit for claiming Annual Investment Allowances. Are all assets eligible for the allowance? A. Unfortunately not all expenditure on plant and machinery will qualify for annual investment allowances (AIA). The most common examples of assets that are not eligible are cars and assets that have been used for some other purpose before being brought into the business, for example a personally owned computer. These assets should still qualify for capital allowances, but allowances will be given gradually over several years, rather [...]

November questions and answers

2018-11-09T23:33:14+01:00November 26th, 2018|Categories: Questions & Answers|Tags: , , , , |

November Questions and Answers Q. Are there any advantages to registering voluntarily for VAT even if my taxable turnover is less than the registration threshold? A. A business can register for VAT even if its turnover (total sales) is below the threshold and it may actually save tax by doing so, particularly if its main clients or customers are organisations that can reclaim VAT themselves. Say you want to purchase a new office printer for your business which costs £100 plus VAT, i.e. £120. You set the £120 paid out against your profits for income tax purposes. If you [...]

October Questions and Answers

2018-10-30T00:34:36+01:00October 31st, 2018|Categories: Questions & Answers|Tags: , , |

October Questions and Answers Q. I bought my house in 1998 and I lived in it until 2000 when my employer required me to work in Spain. I returned to live in the house in 2005 and have lived there until now. I have never owned any other properties. Will I qualify for full private residence relief for capital gains tax purposes when I sell my home? A. Based on the information provide, you should be entitled to full relief. The qualifying periods of absence are: a) absences for whatever reason, totalling not more than 3 years in all [...]

June Questions and Answers

2017-06-22T14:24:36+01:00June 22nd, 2017|Categories: Questions & Answers|Tags: , , , |

Q. Before I became registered for VAT, I bought a capital item from a friend, which cost £1,000. As it was a private purchase, I did not pay any VAT. I have now joined the flat rate scheme (FRS) for VAT and have just sold the same item for £500. Should I have charged VAT on the sale and included the gross total in my calculation for flat-rate VAT? A. HMRCs VAT Notice 733 at paragraph 15.9 confirms that where input tax is reclaimed on capital expenditure goods then, when the goods are eventually sold out of the business, you [...]

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