It may be tempting for self-employed individuals to claim tax deductions for expenditure that is not ‘wholly and exclusively’ for the purposes of their trade, profession or vocation. Unfortunately, the tax rules generally preclude a deduction for such expenditure. Mixed use However, if an expense has a mixed (i.e., business and private) purpose, the tax… Read More »
Business property relief (BPR) offers relief from inheritance tax (IHT) of 100% (or 50%) on a transfer of value which is attributable to ‘relevant business property’. Unfortunately, not all unquoted company shares qualify for BPR. Certain company activities make the shares ineligible for relief, such as dealing in stocks or shares, land or buildings, or… Read More »
Companies holding residential property in the UK need to be wary of the annual tax on enveloped dwellings (ATED) (FA 2013, Pt 3, Schs 33-35). ATED is charged annually on companies (and other ‘non-natural persons’) that hold an interest in a UK residential dwelling (a ‘single-dwelling interest’) worth more than a statutory threshold. ATED may… Read More »
Inheritance tax (IHT) business property relief (BPR) is available to business owners if certain conditions are satisfied. BPR (at the 100% rate) applies to ‘relevant business property’ including a business or interest in a business. Unfortunately, not every business potentially attracts BPR, such as where the business consists wholly or mainly of ‘making or holding… Read More »
Bank or building society accounts are often held in the joint names of two or more family members. As a general rule, the person liable for tax on the interest credited is the person receiving or entitled to the interest. Spouses (and civil partners) However, where jointly held property is in the names of spouses… Read More »
Company purchases of own shares can often be helpful. For example, a shareholder in a family trading company may wish to retire and exit the company, to make way for the next generation. It’s the law However, the transaction must satisfy company law requirements (in Companies Act 2006) to be a valid company purchase of… Read More »
The inheritance tax (IHT) allowance (or ‘nil rate band’) (£325,000 for 2022/23) is generally available to individuals. For married couples (and civil partnerships), the transferable nil rate band (TNRB) rules broadly allow claims for unused nil rate band of a deceased spouse (or civil partner) to be transferred to the survivor. The survivor’s nil rate… Read More »
Land and buildings (e.g., the family home) are often held in joint names, such as by spouses (or civil partners), or parent and offspring. When it comes to valuing an interest in a jointly-owned property for inheritance tax (IHT) purposes (e.g., on death), it is necessary to consider the valuation methodology. Disposing of a joint… Read More »
Spring is in the air; the perfect time for people with a ‘significant other’ to show how much they care; and if it can be done tax-efficiently, so much the better! Here is a selection of romantic tax tips for couples. Dinner for two Are you a business owner? If your beloved is your only… Read More »
It is relatively common for certain assets (e.g., a property) to be jointly owned. A property can be owned either as ‘joint tenants’ or ‘tenants-in-common’ (this article applies to property ownership in England and Wales). If a property is bought equally, it will be held as joint tenants unless the owners direct otherwise. Pass it… Read More »