Tax Systems Share Discussion Threads

[optomistic] 14/9/2013 11:48

MIATA, is the program covering the B&B episode?

[miata] 14/9/2013 11:42

You can watch Panorama: Tax, Lies and Videotape on BBC One, Monday 16 September at 20:30 BST.

[optomistic] 14/9/2013 11:01

Bradford & Bingley another example of government (G Brown) taking shares from the holders...nil compensation paid!

[miata] 14/9/2013 09:29

Railtrack shareholders were compensated, the initial offer of 70p/share was ultimately raised to 262.5p after legal action, this was broadly regarded as fair.

British Energy shareholders fared far worse. Due to a reduction in electricity prices and the climate change levy, in a move that was described by The Times as 'a de facto nationalisation of the group', shareholders received only 2.5% of the shares of the new company. A disgraceful episode only possible under a Labour administration.

So if, for example, the government were to decide that water should be free, your water company shares would become worthless.

[escapetohome] 14/9/2013 01:21

Yes - I would say they can - look at railtrack - the govt came in and nationalised it and took away the peoples shareholdings. I do not know if those shareholders were compensated.

[shareho1der] 14/9/2013 01:06

Can your shares be confiscated by the government .?

[escapetohome] 14/9/2013 00:47

Thanks Miata I will give it a go without submitting first.

I use a software package to calculate each gain on the share over the tax year so I will use the software package report on the share gain as the calculation worksheet ( this is because I trade fairly frequently and so the software package applies all the rules and makes it simple for me to calculate the gain) . I will not use the formal worksheet provided.

[miata] 13/9/2013 22:08

There are 'Capital gains worksheets' in the online self assessment, "complete one worksheet for each asset disposed of (maximum of 20 worksheets)".

Disposal proceeds is the amount you received.

Complete the all the pages and the system will compute your tax - do not worry you can review, save and amend without submitting your return. Submitting your return (step 8) is a separate step.

[escapetohome] 13/9/2013 21:09

I am completing a self assessment form on line for the first time. I have a capital gain of around £30,000.

I am on 4. Listed shares and securities.
There is a box: DISPOSAL PROCEEDS: Would this be the value of all the money that I have recieved on the sale of my shares - IE 'Total Received' including the shares that gained and lost?

Also where will I enter on the online form my allowance of £10,600, so that I will not be charged any CGT on this part of my Disposal proceeds?

Sorry for the most basic questions and I would appreciate it if anyone can please answer these questions.

[tpaulbeaumont] 03/9/2013 09:14

dont think so miata, that mob offer account management wrapped in a so called "fund" style?

[miata] 02/9/2013 17:55

So I believe.

[miata] 02/9/2013 17:34

Yes, spreadbets are CGT exempt unless you take professional steps to offset risk.
This mob seems to offer funds on which clients can spreadbet.

[tpaulbeaumont] 02/9/2013 17:22

Hey Miata, chaps, I was under the impression that spreadbets are CGT exempt unless theyre "arguably your main source of income" or some such wooly statment? If this is indeed the case, whats the deal with this mob?
hxxp://www.titanip.co.uk/

[goatherd] 31/8/2013 10:32

Good advice though, I think, Jeffian! I always try and buy a book or two before consulting a professional [and I no longer use an accountant, as one is not required even for companies nowadays].

I remember buying a book on planning law before consulting a solicitor. I took it to the meeting - and at the end of the meeting he borrowed it from me!

Richard

[miata] 30/8/2013 20:31

Holiday homeowners and buy-to-let landlords who have sold properties which are not their main residence and have not declared any profit to HM Revenue and Customs now have just one week to pay up.

The taxman's property sales campaign, launched in March, has been aimed at those who have sold second homes in the UK or abroad where capital gains tax should have been paid. This includes properties that have been rented out and holiday homes.

Taxpayers have until next Friday to pay the CGT and HMRC says those who come forward voluntarily will receive the best possible terms and any penalties will be less severe than if the taxman catches up with them first.

[miata] 30/8/2013 17:45

'combined threshold for married couples' isn't a totally accurate description.

You can apply to HMRC to 'transfer the nil rate band' from one partner (husband) to another (wife). Get form IHT402.

You first need to work out what percentage of the threshold you can transfer.
It isn't the unused amount of the first spouse's nil rate band that determines what you can transfer but the unused PERCENTAGE.



Jamila dies in May 2007, leaving an estate worth £300,000. She leaves £40,000 to each of her three children and the rest of her estate (£180,000) to her husband Kamil. When Jamila died the Inheritance Tax threshold was £300,000.
Kamil dies in September 2009, leaving an estate worth £500,000 which he leaves equally to his three children. When Kamil died the threshold was £325,000.
The amount of Jamila's threshold that can be transferred to Kamil is:
threshold at the time of the first death (Jamila) = £300,000
minus the legacies to her children who aren't exempt = £120,000
leaving a remaining threshold of £180,000
The percentage by which to increase the threshold on the second death (Kamil) is:
the threshold remaining from Jamila's death (£180,000)
divided by the threshold at the time of Jamila's death (£300,000)
multiplied by 100 (£180,000 ÷ £300,000 × 100 = 60%)
So the threshold available to transfer to Kamil's estate is £325,000 × 0.6 (60%) = £195,000. This is added to Kamil's own threshold of £325,000, increasing his threshold to £520,000. Because Kamil's estate is lower than this, there's no Inheritance Tax to pay.



My suggestion is buy a few tax books on IHT and trusts [to give you a full grasp of the issues].

[miata] 30/8/2013 16:24

Its complex and its bad news, IHT is payable on the aggregated assets. Best explained by an (old) example.


The deceased had an interest in a trust, how do I work out who pays what tax?

If the deceased had a life interest in a trust as well as a personal estate, the tax due on the trust property is paid by the trustees of the trust and the tax due on the personal estate is paid by the personal representatives.

This means that the tax has to be apportioned between the personal estate and the trust.

Mr Lloyd died on 9 April 2005. As well as his personal estate he had a life interest in a trust set up under his late wife's will.

Deceased's net estate £254,678
Mrs J Lloyd Will Trust net value £123,450
Aggregate chargeable transfer £378,128
Less Inheritance Tax threshold £275,000
Total liable to Inheritance Tax £103,128
£103,128 @ 40% = £41,251.20 total Inheritance Tax due

You can now calculate the portion of tax which is payable by the executors and the portion which is payable by the trustees of the Mrs J Lloyd Will Trust.

deceased's net estate ÷ aggregate chargeable transfer x total Inheritance Tax due = tax payable by the executors
£254,678 ÷ £378,128 x 41,251.20 = £27,783.64
net value of Mrs J Lloyd Will Trust ÷ aggregate chargeable transfer x total Inheritance Tax due = tax payable by trustees
£123,450 ÷ £378,128 x £41,251.20 = £13,467.56

IHT100b form


Further advice:

[miata] 28/8/2013 18:44

£2billion in 'holiday tax' just to escape Britain as those flying off are forced to pay Air Passenger Duty, VAT and insurance tax.

The TaxPayers' Alliance says UK flight taxes are the most expensive in the world, adding hundreds of pounds to some holidays.

[miata] 24/8/2013 10:01

£100,000 income, £400 tax bill
Virtually tax-free retirement.

The detail: how it works
An individual has a portfolio of £1.5m. By building up savings of £500,000 in a self-invested personal pension (Sipp), £500,000 in an onshore bond and another £500,000 in both Isas and Oeics, he or she could receive income of £101,703 a year and pay £378 in tax.

For the purposes of this example, the life insurance bond is assumed to be from an original investment of £250,000 made from an inheritance 10 years ago, which has now grown to £500,000. The Oeic is assumed to have built up by saving £12,000 a year, growing at an average 6.5pc a year for 20 years. The Oeic is invested in low-yielding growth funds producing dividends of 1pc a year, giving £5,000 income net or £5,555 gross, from which £555 in tax has already been deducted at source.
Under our example the individual crystallises £50,000 of the Sipp pot, giving a 25pc tax-free lump sum of £12,500, plus £2,475 a year from income drawdown, assuming age 65 and a gilt yield of 4pc. We also assume he receives basic state pension of £5,728.
He also withdraws £26,000 from the bond by surrendering 13 of the 250 segments under which the product has been written. The chargeable gain of £13,000 over 10 years does not create an income tax liability.
He then also draws £25,000 from the Oeic, with a capital gain of £13,000, of which £2,100 is liable for capital gains tax after the annual £10,900 exemption is taken into account. Finally, he withdraws £25,000 from the Isa, on which no tax is payable at all.
This individual's income tax liability falls below his personal allowance and his capital gains tax bill is just £378, giving him a total tax rate of barely 0.4pc on an income of £101,703.

[miata] 21/8/2013 15:55

If you want to be a trader, set up a company. The small company (profits up to £300,000) tax rate is 20%, from 2014 even the 'large company' tax rate will be only 21%.

Capital gains tax rates for individuals are 18% and 28% - the tax rate you use depends on the total amount of your taxable income and gains.