The sale of an individual’s home is normally exempt from CGT, with neither a taxable gain nor loss arising. This is certainly the case where it has been the individual’s only or main residence throughout the period it has been owned, or if owned prior to 31 March 1982, then the period since then.
Capital Gains Tax (CGT) applies when chargeable assets are disposed of and is applicable to individuals and trustees but not to limited companies, although Limited Companies do pay Corporation Tax on the gains that they make.
The Child Tax Credit and Working Tax Credit are a key part of the Government’s welfare policy which mixes up the tax system with the social security benefits system. The Government is also keen to reward those who are in work with extra benefits. These tax credits have nothing to do with the tax system. They are not refunds or credits of tax, but are simply benefits administered by HMRC.
Most estates (the assets you leave when you die) are still not charged with inheritance tax, as the total value is not high enough, but more estates are being dragged into the IHT net because of property prices. However, with sensible planning a lot can be done to mitigate the effects of IHT.
The income from Buy To Let properties is treated as the profits of a Property Income Business. If the owner of the property is an individual or a trust the profits are charged to income tax for the tax year to 5th April. If the owner is a company the profits are charged to corporation tax for the accounting period of the company.
The corporation tax self-assessment return (CTSA) must be submitted to HMRC along with the accounts and tax computations, although it is possible to file all this information online through the HMRC website. The filing deadline for the CTSA return (plus accounts and tax computations) is normally 12 months from the end of the accounting period.
The Enterprise Investment Scheme provides for some significant income tax and capital gains tax reliefs for individual investors in unquoted trading companies. There are some very complex conditions which must be met for the tax reliefs to be given, so this helpsheet can only give a brief overview of how the various tax reliefs work.
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