06/01/2016, by Tax Insider, Tax tip - General Tax
Tax relief on pension contributions is available on contributions up to the annual allowance. To the extent it is unused the annual allowance can be carried forward for up to three years. The annual allowance is £50,000 for 2012/13 and 2013/14 and £40,000 for 2014/15. As a result of changes to align the pension input period (the period over which pension contributions are tested against the annual allowance) with the tax year from 2016/17 onwards, for 2015/16 only, the annual allowance ... Continue Reading
04/01/2016, by Lee Sharpe, Tax article - Budgets and Autumn Statements
TW Ed reviews FB16 for dividends, savings income and the new “allowances”, plus incorporation, and the horror of the Transferable Personal Allowance.
Foreword
In this article, I have attempted to distil the key points and implications of the opening clauses of Finance Bill 2016 dealing with dividends and savings income. It is entirely possible that I have misunderstood. If that should be the case, then I shall of course endeavour to update / amend if and when appropriate.
Preamble ... Continue Reading
04/01/2016, by Tax Insider, Tax tip - Property Tax
If there is an overall income tax loss made for a tax year, then unless the loss arises in relation to certain capital allowances, the loss is generally relieved as follows:• Carried forward and set against profits made in future years on properties in the same UK property business (or if overseas property, against the same overseas property business).• If the loss arises on or after cessation, relief may be set against the owners’ general income ... Continue Reading
21/12/2015, by Tax Insider, Tax tip - Property Tax
By default, rental profit from property jointly owned by spouses/civil partners is taxed 50:50 irrespective of the underlying respective proportion of actual ownership. This does not apply to property held within a business partnership proper. However, if it would be more income tax efficient for the split of profit to be different, then the profit may be divided according to actual ownership once HMRC has been notified. A couple may change the underlying ownership to suit, but note that such unequal ... Continue Reading
16/12/2015, by Tax Insider, Tax tip - Business Tax
Most professions require members to pay an annual subscription to a professional association for the right to use the qualification and designatory letters.Where the taxpayer is self-employed, a deduction can be made in computing business profits for the cost of the professional subscription where the profits from that profession are assessed on the member. Subscriptions to local professional societies or branches are also deductible if the object of the branch or society is mainly professional.Where ... Continue Reading
14/12/2015, by Tax Insider, Tax tip - Property Tax
Any business owner taking out a mortgage/loan in order to finance capital to invest in a business is allowed to deduct interest paid from income received. Renting is deemed to be a ‘business’ in the taxman’s eyes for income tax purposes. The ‘capital’ investment is the property itself. Any mortgage interest paid is deductible from rental income received but restricted to the market value of the property if originally not purchased with a view to rent.Should an owner ... Continue Reading
07/12/2015, by Tax Insider, Tax tip - General Tax
Payments into an approved pension scheme attract tax relief at your highest rate of tax and are deemed to be paid net of basic rate tax. Contributions attract tax relief to the extent that they do not exceed the available annual allowance.It is also possible to carry forward unused allowances from the previous three tax years which means that it is possible to make significant tax-relieved contributions to a registered pension scheme.A basic rate taxpayer will effectively pay £80 for a £100 ... Continue Reading
30/11/2015, by Lee Sharpe, Tax news - Business Tax
TW Ed is reassured that the new anti-avoidance provisions will not prevent conventional agreements between vendor and purchaser to fix a price.
When the new anti-avoidance measures were announced, I read
“Businesses who seek to obtain tax advantages by... ... manipulating disposal values leading to excess capital allowances...” and I was concerned that this could be used by HMRC to attack conventional agreements whereby the price for eligible items is fixed some way off market value ... Continue Reading
30/11/2015, by Tax Insider, Tax tip - Property Tax
Expenses incurred in the running of a property letting business are deductible from rental income received in calculating the taxable profit. However, just because a payment has been made, it does not necessarily mean that it will be allowable.Strictly, for an expense to be allowed the business purpose must be the sole purpose; there must be no dual reason for the expense. Where it is difficult to split the business element from any private element then the whole expense amount is usually disallowed.In ... Continue Reading
30/11/2015, by Tax Insider, Tax tip - Business Tax
Tax relief is available on money borrowed to buy equipment or machinery for use in a partnership, provided that the items in question qualify for capital allowances.It may therefore be advisable to borrow money to buy equipment and machinery and to use savings for a non-qualifying purpose to maximise the tax relief available.It should be noted that the availability of certain income tax reliefs is capped at the greater of £50,000 and 25% of income. Relief for qualifying loan interest is subject ... Continue Reading
