12 - Advice Flashcards
1
Q
CGT
Methods of dealing with CGT
A
- Bring forward sales to utilise CGT allowances in earlier years;
- Split a transaction across 2 tax years to use 2 years allowances;
- Transfer assets (or split assets) between spouses/civil partners;
- Use EIS/SEIS to defer CGT gains;
- No CGT payable on death.
2
Q
What tax-free investments are available?
A
- National Savings Certificates;
- ISAs;
- Child Trust Funds (or JISA).
3
Q
Life Assurance tax treatment summary
- Internal tax;
- Investor tax;
- Other advantages.
A
- Internal tax is 20% on gains and interest income, but 0% on dividends;
- Qualifying policies (only £3,600 pa premiums) are tax free after 10 years;
- Non-qualifying policies don’t pay basic rate tax, just higher/additional rate uplift;
- Tax is deferred until the policy is encashed in any case;
- Can withdraw 5% (of the original investment) each year.
4
Q
Things to keep in mind when leaving the UK
A
- Double taxation treaties will limit the extent of being taxed in two countries;
- There are strict rules to establish non-residence in order to avoid UK taxes;
- Your income within the UK will still be taxed in the UK regardless;
- You will also be subject to IHT in the UK unless you are also non-domiciled.
5
Q
Considerations for moving to the UK
A
- If UK domiciled you’ll be liable to tax on worldwide income when you arrive;
- Non-UK domiciled only on UK income, plus potentially some other taxes on remittance basis;
- UK domiciles should consider realising gains before arriving, otherwise CGT will be due on gains since acquisition (not since UK arrival);
- Note that after 17 years you will be deemed domicile;
- Assets transferred into a trust (usually discretionary) while non-domiciled are excluded property, not subject to UK IHT even if they later become domiciled.
