Disposal
Sale of an asset etc..
How is CGT calculated
1- calculate the amount of gain
2- deduct annual exempt amount
3- deduct any losses from the gain
4- taxable gain is left over
5- add to taxable income to establish what rate of CGT should be paid for both
Private residence relief
Available when selling your main residence
Business asset disposal relief
Pay lower rate of tax
Available to business owners who own at least 5% and entitled to 5% of profits
Roll over relief
Rolling over existing asset to future asset. Must’ve been bought 1 year before or 3 years after of sale of original asset
Hold over relief
Gifting asset to another recipient. CGT paid when they sell - not you
What is inheritance tax?
Tax charged on estate of deceased person
Charged on the amount the value exceeds the available nil-rate band at the date of death.
Nil-Rate Band
Amount of your asset that can be passed down to beneficiaries free from IHT
Residence Nil Rate Band
If the estate includes a residence (house) that’s being left to direct descendent, an additional (RNRB) can be applied
Potentially exempt transfer
Usually a gift of an asset from a persons estate, can be subject to IHT if the donor dies within 7 years of gifting and exceeds NRB
IHT on potentially exempt transfers
Death within / Tax due
1 year / 100%
2 year / 100%
3 year / 100%
3-4 year / 80%
4-5 year / 60%
5-6 year / 40%
6-7 year / 20%
7+ year / NO TAX
Chargeable lifetime transfer
Gifts to companies/organisations which tax is due at reduced rate.
‘Lifetime’ tax is due when added to other chargeable lifetime transfers (past 7 years) and exceeds the NRB
Value added tax (VAT)
Tax on most good and services
Businesses with high turnover may wish to register for VAT
Zero rated goods may be subject to VAT
Stamp duty and stamp duty reserve tax (SDRT)
Stamp duty is payable for securities and land
Paid on paper documents that transfer ownership of financial assets and stamped by HMRC
SDRT is charged on electronic transfers
Stamp duty land tax
Tax when buying a property, different thresholds apply
Corporation tax
Paid by limited companies on their profits
Up to threshold - due 9 months after
Over threshold - quarterly instalments
Withholding tax
Tax on income before received - mainly if non resident (sportsperson)
Aim is to make sure money is taxed before leaving country
