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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 [...]

Give from income to save inheritance tax

2019-09-02T11:29:18+01:00July 6th, 2019|Categories: Articles & Guides, Blog, Taxation|Tags: , , |

Within a family scenario, there are many situations in which one family member may make a gift to other family members. However, the way in which gifts are funded and made can make a significant difference to the way in which they are treated for inheritance tax purposes. Not all gifts are equal There is no inheritance tax to pay on gifts between spouses and civil partners. A person can make as many lifetime gifts to their spouse or civil partner as they wish (as long as they live in the UK permanently). There is no cap on the [...]

Making use of gift exemptions for IHT

2019-09-02T11:23:11+01:00June 14th, 2019|Categories: Blog, Personal Finance, Taxation|Tags: , , , , |

According to a recent survey undertaken on behalf of HMRC, only 25% of people making financial gifts have a working knowledge of inheritance tax (IHT) rules surrounding such payments. The report entitled Lifetime Gifting: Reliefs, Exemptions, and Behaviours, reveals a significant lack of awareness of the gifting rules, liability for inheritance tax and the risk of making financial gifts without considering tax rules, which can apply for any gifts over £3,000 in value in a given tax year. The research also revealed that those with potentially smaller estates (below £500,000) appear to have a limited knowledge of the longer-term reach of inheritance [...]

May 2019 Questions and Answers

2019-09-02T11:22:43+01:00May 22nd, 2019|Categories: Questions & Answers|Tags: , , , , |

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 for tax due to HMRC, [...]

January 2019 Questions and Answers

2019-09-01T23:09:11+01:00January 24th, 2019|Categories: Questions & Answers|Tags: , , , , |

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 due to HMRC, or to [...]

November questions and answers

2019-09-01T23:07:45+01:00November 26th, 2018|Categories: Questions & Answers|Tags: , , , , |

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 are a basic rate taxpayer [...]

October Questions and Answers

2019-09-01T22:08:58+01:00October 31st, 2018|Categories: Questions & Answers|Tags: , , |

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 b) absences during which you're [...]

IHT: Main Residence Nil-Rate Band

2019-09-01T22:03:42+01:00June 8th, 2017|Categories: Taxation|Tags: , |

From April 2017, each individual spouse or civil partner will be offered a residence nil rate band (RNRB), which is designed to help pass on a home to 'direct descendants', including children or grandchildren, tax-free after their death. The rules governing the inheritance tax (IHT) nil rate band are complex and it is always recommended that prior professional advice is considered. Phasing in of RNRB The RNRB is being phased in over a four-year period as follows: - £100,000 in 2017-2018 - £125,000 in 2018-2019 - £150,000 in 2019-2020 - £175,000 in 2020-2021 Broadly, the new RNRB will be [...]