Tax News

Advantages of Furnished Holiday Lettings

Many of the recent changes in the taxation of buy to let rental businesses do not apply to property businesses that qualify as furnished holiday lettings (FHL). 

Exceeding the Annual Pension Allowance

If your pension savings exceed the annual pension input limit (generally £40,000) then there is an annual allowance charge. The effect of the annual allowance charge is to reduce tax relief on any pension saving over the annual allowance.

Did You Get a Big Tax Bill and Now Want Some Back?

Many of you will have just paid your 2016/17 tax bill before the 31 January 2018 deadline, and some of you will also have paid 50% of next year’s tax on account. Here are a couple of tax planning ideas that can help you obtain a tax refund.

Invest in EIS or Seed EIS qualifying companies

Advisory Fuel Rate for Company Cars December 2017

These are the suggested reimbursement rates for employees' private mileage using their company car from 1 December 2017.

Note that for hybrid cars you must use the petrol or diesel rate.

Where there has been a change the previous rate is shown in brackets.

No Indexation of Company Gains After December 2017

Indexation allowance was introduced in the 1970s to provide relief from paying tax on inflationary gains based on increases in RPI. The relief was abolished in 1998 for individuals and trusts, and replaced with taper relief. However, it was retained for companies. The Autumn Budget announced that indexation for corporation tax would cease for disposals from January 2018 onwards, although indexation up to December 2017 would be retained. 

Relief From Additional 3% SDLT Charge

Much of the focus in the Autumn Budget on Stamp Duty Land Tax (SDLT) concerned the abolition of the duty for first time buyers of property up to £300,000. There was also welcome news for those involved in other property transfers where the 3% supplementary SDLT charge potentially applies when an interest in a second property is acquired. 

Downsizing to a Smaller Property?

The new inheritance tax relief for passing on the family home is protected even when you downsize to a smaller property.

Tax Relief for Energy Saving Technology

For a number of years there has been a generous 100% tax break for businesses that install energy saving technology in their premises. This is in addition to the £200,000 annual investment allowance for plant and machinery.

Consider Making Regular Gifts Out of Surplus Income

Whilst on the subject of inheritance tax planning why not consider setting up a standing order to family members? Such regular gifts can be outside of the scope of inheritance tax provided they are made out of surplus income and not out of capital.

Passing on the Family Home

New inheritance tax rules for passing on the family home started on 6 April 2017. This new relief should be taken into consideration when drafting your Will and we can work with your solicitor to make sure your Will is tax efficient.

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