FINANCE
BY RICK SCHOFIELD , PARTNER , AZETS
Tax Top Tips – Three “ must do ” things for individuals
AS WE MOVE FURTHER INTO THE 2021 / 22 TAX YEAR AND ARE HOPEFULLY OVER THE WORST OF THE PANDEMIC , NOW IS AN OPPORTUNE TIME TO REVIEW AND REFRESH YOUR FINANCIAL AFFAIRS AND CONSIDER YOUR TAX REQUIREMENTS . HERE ARE OUR THREE ‘ TAX TOP TIPS ’ FOR INDIVIDUALS .
1 . Property transfers & stamp duty holiday
Temporary reduced rates of stamp duty apply for residential property purchases . The temporary nil rate band of £ 500,000 will be in place until 30 June 2021 . From 1 July 2021 to 30 September 2021 the nil rate band will be £ 250,000 and then will return to the standard amount of £ 125,000 on 1 October 2021 .
If you are transferring or acquiring residential property ( or considering it ) you may wish to accelerate matters and ensure that you complete before the relevant dates to achieve stamp duty savings .
2 . Capital taxes planning
Despite rumours leading up to the Budget , no major changes to CGT were announced in March . However , it is the view amongst many tax professionals that it is only a matter of time before taxes are increased with CGT still being a likely suspect .
In recent weeks it was announced that the Office of Tax Simplification proposes further reforms to CGT , ranging from considering tax liabilities when moving home to getting divorced and an extension of the tight 30-day deadline for settling CGT bills when selling property ( which would be a welcome extension ).
If you are considering selling or transferring any assets , possibly into trust for example as part of your inheritance tax ( IHT ) planning , you may wish to accelerate such sales / transfers in light of potential forthcoming CGT changes .
3 . Have you considered the use of a family trust ?
Our third top tip applies to those considering asset protection and / or IHT planning ( otherwise HMRC may be entitled to IHT at the rate of 40 % on your death ).
A family trust can be controlled by you , holds assets for the benefit of your children and remote family members ( with distributions made purely at your discretion ) and can remove the value out of your personal IHT estate , reducing your estate to a more manageable value .
Certain assets can qualify for 100 % relief from IHT upon transfer into trust and each person generally can transfer up to £ 325,000 into trust without incurring any tax charges upon entry .
If you own an interest in a business , you could transfer part into trust pre-sale and secure the IHT ‘ business property ’ relief which would otherwise disappear if you receive cash into your own hands personally .
We are here to help
At Azets , we strongly believe that planning is essential to ensure that individuals and businesses are fully briefed on key changes and how they may be impacted as a result .
We also know how important it is to have certainty regarding the tax you pay and our national tax experts , based locally to you , are on hand to provide support through the taxing times that are certainly ahead of us .
To discuss any of the areas raised above in more detail , please contact rick . schofield @ azets . co . uk or call 01233 629255 .
Local offices : Ashford : 01233 629 255 / Canterbury : 01227 454 861 Maidstone : 01622 690 666 / Orpington : 01689 827 505 Sandwich : 01304 249 997
Accounting | Tax | Audit | Advisory | Technology www . azets . co . uk
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