IT IS EITHER LIKE A BOX OF CHOCOLATES, OR A BED OF ROSES, BUT HOWEVER YOU PREFER TO DESCRIBE LIFE, ONE THING’ S FOR CERTAIN – WE SHOULD EXPECT THE UNEXPECTED. NO MATTER WHAT STAGE OF LIFE YOU’ RE AT, THERE IS ALWAYS SOME PLANNING YOU CAN DO. WE’ VE STARTED AT STAGE ONE – MARRIAGE. HERE’ S A FEW THINGS TO HELP YOU ON THE WAY.
FINANCE
LIFE IS LIKE AN ACCOUNTANCY CYCLE
BY KEVIN THORNBY, TAX MANAGER AT WILKINS KENNEDY
IT IS EITHER LIKE A BOX OF CHOCOLATES, OR A BED OF ROSES, BUT HOWEVER YOU PREFER TO DESCRIBE LIFE, ONE THING’ S FOR CERTAIN – WE SHOULD EXPECT THE UNEXPECTED. NO MATTER WHAT STAGE OF LIFE YOU’ RE AT, THERE IS ALWAYS SOME PLANNING YOU CAN DO. WE’ VE STARTED AT STAGE ONE – MARRIAGE. HERE’ S A FEW THINGS TO HELP YOU ON THE WAY.
GETTING MARRIED
When the time is right to tie the knot, you might just find the taxman has left a gift of his own in the pile of wedding presents. If you are married or in a civil partnership and if one of you earns less than the £ 11,850 earnings threshold, you are able to transfer a proportion of your personal allowance between you. The caveat is that the other who is transferring the allowance must be a 20 per cent taxpayer – higher rate earners are exempt.
If you were born before 6th April 1935, you cannot claim marriage allowance – but you will be entitled to married couple’ s allowance, which could give you a reduction on your tax bill of up to £ 869.
BUYING A HOUSE OR PURCHASING A SECOND HOME
If you decide to purchase a property together, you might come across a few scenarios. If you purchase your first property together, and neither of you have purchased property before, you will be eligible for SDLT relief. The government introduced legislation during the last autumn budget that excluded all first time buyers from paying SDLT on properties up to £ 300,000 and then just five per cent up to the value of £ 500,000.
What if one of you already owns a property and you want to keep it, but you also want to purchase a joint property together? In that instance, you would pay the higher rate of SDLT on the new property purchase. This will be made up of the standard SDLT payment, plus a three per cent surcharge, which applies to all second homes. This includes any property purchased abroad, or where there is a shared interest in property, for example if it is held in trust. If you sell the property and purchase another, as long as it is replacing your main residence, you would just pay the standard rate of SDLT.
TRANSFERRING ASSETS
If you choose to dispose of assets and you live with your spouse or civil partner, you can transfer assets between you free from Capital Gains Tax( CGT). If you are separated, or you did not live with your civil partner or spouse at all in the tax year, then you are excluded from CGT relief. If the spouse or civil partner then choose to sell the asset, they will have to pay tax on any gain at the point of disposal.
The receiving partner will not have to pay acquisitions tax either, as the transfer will be treated as a gift. It might also be worth considering other reliefs such as business property relief or Entrepreneurs’ Relief. Every situation is different and we’ d recommend seeking advice from those in the know. Contact Wilkins Kennedy’ s offices in Ashford, Canterbury, Maidstone, Orpington and Sandwich for more information.
Local offices:
Ashford: 01233 629 255 / Canterbury: 01227 454 861 Maidstone: 01622 690 666 / Orpington: 01689 827 505 Sandwich: 01304 249 997
enquiries @ wilkinskennedy. com www. wilkinskennedy. com
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