Buy-to-Let vs. Furnished Holiday Let

In this article we examine changes for Buy-to-let Landlords, tax advantages of investing in holiday homes and business owner John Harrison shares his experiences of running Furnished Holiday Lets; including his top tips.    In April 2017 new provisions took affect which saw tax relief for finance costs on residential properties being gradually restricted over...

REQUEST THAT THE PENSION CHARGE IS PAID BY YOUR FUND BY 31 JULY

The Pension Annual Allowance tax charge depends on the individual’s marginal rate of tax. Where their income exceeds £150,000 it would be at 45%. Thus if the pension input for 2018/19 Was £40,000 and the limit is tapered to £10,000 the excess of £30,000 would incur a £13,500 tax bill on top of their normal...

HIGH INCOME CHILD BENEFIT CHARGE AND STATE PENSION

Last month we looked at tax planning to minimize or eliminate the high income child benefit charge to keep both husband and wife (or civil partners) looking after a child below the £50,000 threshold. Where the income of one of the individuals exceeds £60,000 such that the whole of the child benefit is taxed they...

NEW WORKPLACE PENSION LIMITS FROM 6 APRIL 2019

Research published recently by The Pensions Regulator shows that the vast majority of staff are continuing to save more into their pension following the increases in pensions contributions in April last year. The on-going duties survey of employers showed less than 2% of staff in medium, small and micro businesses asked to leave their workplace...

YEAR END: PERSONAL ALLOWANCE, TAX & PENSION PLANNING

  DON’T LOSE YOUR PERSONAL ALLOWANCE! For every £2 that your adjusted net income exceeds £100,000 the £11,850 personal allowance is reduced by £1. Pension contributions and Gift Aid can help to reduce adjusted net income and save tax at a rate of 60%. The restriction applies between £100,000 and £123,700 adjusted net income. Another...

PENSION PLANNING

For most taxpayers the maximum pension contribution is £40,000 each tax year, although this depends on their earnings. This limit covers contributions by both the individual and their employer. The unused allowance for a particular tax year may be carried forward for three years. It can also be added to the relief for the current year, but...

INHERITANCE TAX RULES FOR PASSING ON THE FAMILY HOME

Inheritance Tax Rules This additional relief should be taken into consideration when drafting your Will. Rawcliffe & Co can work with your solicitor to make sure your Will is tax efficient. An additional nil rate band of up to £175,000 is available on death where your residence is left to direct descendants. This is in...

CHECK YOUR PENSION SAVINGS ANNUAL ALLOWANCE

HMRC have updated their guidance on the rules for carrying forward the unused pension savings annual allowance, together with a calculator on their website. For most taxpayers the maximum amount of pension savings that qualifies for tax relief each tax year is £40,000. It is possible to increase this amount by utilising unused relief brought...

PENSION FUNDS CAN BE VERY EFFECTIVE IN ESTATE PLANNING

We have featured the tax efficiency of pension funds investment in a number of recent newsletters. As well as the increased flexibility in terms of draw-down arrangements that were introduced in April 2015 there were some important changes to what happens to the un-drawn funds on death. These changes mean that your pension fund can...

EXCEEDING THE ANNUAL PENSION ALLOWANCE

If your pension savings exceed the annual pension input limit (generally £40,000) then there is an annual allowance charge. The effect of the annual allowance charge is to reduce tax relief on any pension saving over the annual allowance. The annual allowance charge is not at a fixed rate but will depend on how much...