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Reviewing your tax arrangements to minimise liabilities is the
right step in enhancing your future financial security. Our team
have provided an overview of the tax saving opportunities for your
family below.
Couples
For couples, "shifting" income so that it accrues to
the partner with the lower tax rate in some circumstances is worth
taking into account. Some options are highlighted below:
Where couples who are married or in a civil partnership jointly
own an income-generating asset, each is taxed on 50% of the income.
So simply putting property into joint names can in some situations
save tax. However, this does not apply to dividend income from
jointly owned shares in close companies (broadly those owned by
five or fewer people) which is always split according to the actual
ownership of the shares.
If, for tax purposes, it is beneficial for one partner to be
taxed on all the income from an income generating asset, full
beneficial ownership must be transferred to them. This may give
rise to inheritance tax and capital gains tax implications,
particularly for non-married couples.
Introducing a spouse as a partner in a business or giving a
partner shares in a company will normally be effective in
"shifting" a proportionate share of income subsequently
arising.
Children
Parents can transfer income-producing assets to an unmarried
child aged under 18, but the parent will be taxed unless the income
is less than £100 a year. Gifts by grandparents or gifts to
children aged 18 or more are not affected by this rule.
A parent can put money into a personal pension for a child. Even
if the child has no income, the parent can pay in up to
£2,880 a year, which becomes £3,600 with tax
relief.
We can assist in shaping strategies designed to enhance the
future financial security of you, your family and your
business.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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On 18 April 2013 the UK government issued a legal challenge to the decision of the EU Council of 22 January 2013 which authorised a subset of the EU (not including the UK) to introduce a financial transaction tax.
A discussion on the changes brought by the Finance Bill in relation to the commitments to raise the Inheritance Tax and exempt limit on the value of transfers of assets to a non-UK domiciled spouse or civil partners.
In his March 2011 Budget statement the Chancellor of the Exchequer announced consultation on the introduction of a statutory definition of tax residence.
The European Court of Justice recently ruled that VAT on investment management fees paid by the trustees of a UK defined benefit pension scheme is irrecoverable under a VAT exemption for special investment contained in two EU Directives.
In the latest budget, Chancellor George Osborne announced that the corporation tax rate in Britain will be cut by an additional one per cent to 20 per cent by April 2015.
A summary of the main Budget items affecting farmers and landowners.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Ian Stewart, Chief Economist At Deloitte, On Budget 2013
