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Inheritance Tax – Making Tax-free Gifts

There are various exemptions, and potential exemptions, which make it possible to make gifts free of inheritance tax. Making tax-free gifts is a useful way to reduce the value of your estate – and ultimately the inheritance tax that may be payable on gifts. What counts as a gift? For inheritance tax purposes, a gift…

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Rent-a-Room – New Restrictions

Rent-a-room relief offers the opportunity to enjoy rental income of up to £7,500 tax-free from letting out a room in your own home. It does not matter whether you own or rent your home; what is important is that the let is of furnished accommodation in your own home. How the relief works The relief…

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Inheritance Tax and potentially exempt transfers

Inheritance Tax and potentially exempt transfers It is possible to make gifts during your lifetime free of Inheritance Tax (IHT), as long as you live for more than seven years after making the gift. Most lifetime transfers are ‘potentially exempt transfers’ (PETs). This is to say, they have the potential to be free of IHT…

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Overpaid tax? How to Claim it Back

There are various reasons why you may have paid more tax than you needed to for a tax year. For example, if you only worked at the start of the year, you may not have received all of your personal allowance. Alternatively, if your tax code was incorrect, maybe reflecting historic rather than current benefits…

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Dividend income – How is it taxed in 2018/19?

The taxation of dividend income was reformed from 6 April 2016. Since that date, dividends are paid gross – there is no longer any associated tax credit – and all taxpayers receive a dividend allowance. Dividends not sheltered by the dividend allowance, or any available personal allowance, are taxed at the appropriate dividend rate of…

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Private Lettings Relief

Lettings relief potentially shelters some of the gain from capital gains tax on the disposal of a property which has been an only or main residence at some point during the period of ownership and which has also been let out. Where a residence has been occupied as an only or main home, private residence…

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VAT Capital Goods Scheme

The VAT capital goods scheme affects input tax recovery in relation to high value capital assets by partially exempt traders and businesses where assets are used for both business and non-business purposes. The scheme aims to correct the amount of VAT recovered when the use of the asset in later years varies from that in…

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Rewarding staff suggestions in a tax-free manner

Many organisations operate a staff suggestion scheme and reward employees where a suggestion is adopted which will benefit the organisation or save money. The tax system contains an exemption which allows suggestion scheme awards to be made tax-free – but only up to a certain limit and only as long as the associated conditions are…

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Beware tax scams

HMRC regularly warn taxpayers to be alert to fraudsters purporting to be from HMRC. Recently, they announced that in the last year they deactivated more than 20,000 fake HMRC websites, an increase of 29% on the previous year. HMRC have also called on people to stay vigilant to avoid falling for tax refund scams. The…

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Is the VAT flat rate scheme for me?

The VAT flat rate scheme (FRS) is a simplified VAT scheme that enables VAT registered business to work out how much VAT they need to pay over to HMRC by applying a flat-rate percentage to their VAT-inclusive turnover. However, VAT cannot be reclaimed on purchases (with an exception for certain capital assets over £2,000). The…

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