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Pay Less Capital Gains Tax Interesting case on the tax treatment of disposal of Goodwill 01/02/2012 Determining whether a receipt is taxed as capital gain or income will have a significant impact on the tax treatment. For individuals in particular capital treatment will often be preferred. In this article we look at a very recent case that considered how a receipt for the transfer of Goodwill should be taxed . . . keep reading Structuring a share sale to avoid income tax for directors 30/01/2012 If you're an employee or director in a company, any enhanced rights to payments on a share sale are usually subject to income tax. This could potentially mean income tax and NIC at 50%. If you can structure this as within the charge to capital gains tax you'd be looking at a tax charge up to 28%. In this article we'll look at the facts of a case where the directors undertook some planning to avoid the income tax charge. . . . keep reading CGT position on the remittance of pre 2008 capital gains 27/01/2012 Following a post in our forum we've looked in detail at the position of capital gains that arise before April 2008 but are subject to the remittance basis. In this article we analyse the tax provisions to assess how remittances after April 2008 will be treated . . . keep reading Tax planning on the sale of a business 04/01/2012 There are a variety of ways that both individuals and companies could look to reduce or even avoid capital gains tax on the sale of a business. In this article we look at some of the main tax planning opportunities available to both individuals and companies . . . keep reading Latest case on selling part of a business and Entrepreneurs Relief 23/12/2011 Ensuring that you qualify for Entrepreneurs Relief on a disposal of your business can reduce your CGT rate from 28% to 10%. Where you're not selling all of your business a crucial distinction is whether you are selling business assets or part of your business. Only in the latter case will you qualify for Entrepreneurs Relief. This article looks at a recent case covering this important point . . . keep reading Buying property tax efficiently whilst your children are studying 07/12/2011 The slump in property prices will have made many people consider whether buying property for their children to occupy whilst at university is cost effective. However, given the currently low prices, if you're looking at the long term with perhaps other family members occupying the property and also renting it out to third parties it can still be a worthwhile investment. In this article we look at structuring such a purchase tax efficiently . . . keep reading Selling loan notes free of CGT after you're non resident 05/12/2011 When they sell shares in their companies many business owners receive shares or loan notes in the acquiring company.One of the attractions of this route is a CGT deferral. In this article we look at how a recent case has impacted on anyone planning on becoming non resident and selling loan notes free of CGT on deferred gains. . . . keep reading Using offshore trusts for CGT avoidance 25/11/2011 If you're interested in using offshore trusts for CGT avoidance the main problems you'll face are the anti avoidance rules that can attribute capital gains of offshore trusts back to UK settlors and beneficiaries. This article looks at how carefully (and legally!) sidestepping the rules you can arrange for disposals by an offshore trust free of CGT . . . keep reading Making a negligible value claim to crystallise capital losses - Recent 2011 Update 18/11/2011 If you have assets standing at a loss you would usually need to actually sell them to crystallise the capital loss. However, if the asset has become worthless you can make a negligible value claim to utilise the loss. In this article we look at recent developments in when you can make a negligible value claim . . . keep reading Make the most of the drop in property prices to restructure property investments 09/11/2011 If you have investment properties owned by a company you may be able to take advantage of the decrease in property prices to restructure the ownership and substantially reduce the ultimate capital gains tax charge on disposal.This article looks at the tax implications. . . . keep reading Structuring disposals free of capital gains tax whilst UK resident 07/11/2011 Individuals are subject to an 18% or 28% rate of capital gains tax when they sell assets. If they're selling a business or an interest in a business they can reduce the rate of CGT to 10%. But what about completely avoiding CGT? In this article we look at one strategy using a company and the substantial shareholding exemption to completely avoid capital gains tax . . . keep reading Exchanging ordinary shares for redeemable shares to reduce tax - USERNAME: ellinor Tax Question: I own some shares in a private company. The company basically has only one asset, but one that has parts that can be sold off. Once all parts have been sold off a rump asset would be left producing a small income for the company and with a basic capital value that might or might not be sold later on at a fairly minimal price, say less than £10,000. It has been proposed that I swap my shares for two new sets of shares. One set would be ordinary shares, which would only have an interest in the rump asset and any dividends from the income. The other set would be redeemable shares, and I would have to redeem a part of these shares each time a part of the asset is sold off, the suggestion being that as I would be redeeming shares in return for cash I would be subject to capital gains tax rather than income tax (which would be beneficial for me this tax year). Is this suggestion right, would it mean I would have to pay capital gains tax and not income tax if I did this? Many thanks. . . . keep reading Reducing CGT for the vendor - USERNAME: ellinor Tax Question: I have been offered a piece of land. It has no buildings on it (yet) and has been let out by the owner for grazing. I am guessing but I don't know that it might be classed as agricultural. I do know the seller is worried about capital gains tax. The question I have is - is there anything I can do as a buyer that will reduce the seller's capital gains tax? Maybe by way of an option? Or a series of options parcelling the land out so it is bought over two tax years? Or something else? If there is anything I can do then that might give me a way of ensuring the land is sold to me rather than anyone else. Many thanks. . . . keep reading Offshore Foundations and the remittance basis for CGT purposes 14/10/2011 Offshore foundations are of interest to many of our members, particularly non doms who can benefit from the remittance basis of tax. In this article we look at exactly how offshore foundations and their UK members/founders are taxed on capital gains . . . keep reading How to sell free of CGT and avoid the 5 year non residence requirement 12/10/2011 Establishing non UK residence and then selling free of CGT is one of the most straightforward options for avoiding CGT. However, most people would now need to remain non resident for at least 5 complete tax years to avoid the gain being charged in the tax year of their return. This article looks at when you don't need to be non resident for 5 tax years to be exempt from CGT . . . keep reading Avoiding CGT with the compulsory purchase provisions 03/10/2011 The tax legislation specifies certain circumstances where individuals and companies can rollover capital gains by reinvesting the proceeds into further qualifying assets. There is a general rollover relief, but this only applies to certain assets used for the purpose of a trade. This would not apply to property investors. In this article we look at the compulsory purchase provisions which can be used to defer and in some cases completely avoid CGT . . . keep reading Using a property trust to protect wealth and minimise taxes 12/09/2011 Holding investment property via a UK trust can be a very flexible way of holding property for your family as well as having substantial tax advantages. In this article we look at exactly how you can use a property trust. . . . keep reading How to avoid being a property trader for income tax purposes 17/08/2011 Given the top rate of income tax is 50%, it's even more beneficial to avoid being classed as a property trader for tax purposes, and instead be classed as a property investor. The 28% rate of CGT will make it much more tax efficient for most developers. In this article we look at the different factors to take into account to ensure you're a property investor . . . keep reading Helping your children to buy their first property tax efficiently 01/08/2011 For a variety of reasons many adult children aren't able to get on the property ladder without some financial help from their parents. If you're considering ways to help your children buy their first home it's important that you consider the tax implications both for you and your children. In this article we look at ways to help your children purchase their first property tax efficiently . . . keep reading Offsetting losses on a main residence and maximising tax relief 29/07/2011 With the substantial drop in property prices, and with some areas not forecast to return to 2007 price levels until 2018 many people may be selling properties at a loss. Making full use of that loss will be crucial, particularly given the current low property levels also present many opportunities for investors to realise large capital gains. In this article we look at capital losses on property disposals. In particular how this is affected if you've previously occupied the property and how to maximise tax relief. . . . keep reading Pre-sale dividends to reduce CGT? 27/07/2011 A pre-sale dividend used to be a very popular method of minimising tax on the eventual disposal of a company, however its use diminished with the reduction in the rate of CGT to 18% and where shares qualified for Entrepreneurs Relief. However, after all the changes to the CGT regime in this article we look at how a pre-sale dividend can be used to reduce tax on disposal of a company . . . keep reading Are you receiving income or capital from an offshore trust? 22/07/2011 When you receive a distribution from an offshore trust, assessing whether this is a distribution of capital or income can be important for tax purposes. Income receipts will be assessable on a UK resident (and domiciled) settlor, whereas capital receipts could be subject to various anti avoidance provisions. In this article we look at how to determine whether a trust distribution is income or capital . . . keep reading Bed & breakfasting shares as a non resident 08/07/2011 This article is in response to a question we received relating to how the bed & breakfast rules apply to a non resident planning to move back to the UK. We look at the CGT exemption available for non residents and how this interacts with these share matching rules . . . keep reading Income and property tax planning when your children live with you 04/07/2011 Children are now living with their parents for much longer than in the past. How does this impact you and your children's tax position, and crucially does it pave the way for any tax planning? . . . keep reading Crystallising capital gains without actually selling assets 01/07/2011 There are numerous occasions when it can be tax efficient to crystallise capital gains (eg to make effective use of losses or to take advantage of the CGT exemption prior to becoming UK resident). In this article we look at some more advanced strategies for crystallising capital gains . . . keep reading How non doms can avoid CGT by leaving overseas assets to a spouse 27/06/2011 This is an issue that was raised by one of our members. The changes as from April 2008 mean that non doms can no longer gift overseas assets to their spouses and avoid the remittance tax rules if they subsequently then bring the gifted cash or asset back into the UK. However what if the non dom dies and leaves the overseas assets or cash to his wife in his will? This article looks at the tax positon in such a case . . . keep reading Entrepreneurs relief for non doms and the remittance basis 22/06/2011 Making the most of this generous tax relief can reduce your rate of CGT to just 10%. It can apply to non UK domiciliaries selling overseas businesses or shares in overseas trading companies. This article looks at how Entrepreneurs Relief applies to non domiciliaries whether they are taxed on the arising basis or the remittance basis. . . . keep reading How the new Statutory Residence Test will apply 20/06/2011 On 17 June 2011 more info was provided on how the new Statutory Residence Test will apply from April 2012. In this article we look at how the new Statutory Residence Test will operate and offer some thoughts on the proposed new regime. . . . keep reading When individuals can still qualify for indexation relief in 2011 17/06/2011 It's well known that for individuals, indexation relief has been withdrawn for disposals after April 2008. In this article we look at the one occasion when individuals can still sell in 2011 and qualify for indexation relief . . . keep reading Qualifying for Entrepreneurs Relief when your company has large cash balances 15/06/2011 On a sale of shares you'll only qualify for Entrepreneurs Relief if the company is an unquoted trading company (or the holding company of a trading group). In this article we look at when and how holding cash in a company can restrict Entrepreneurs Relief and how you can still qualify for the 10% rate of CGT . . . keep reading More

Capital Gains Tax Questions

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Capital Gains Tax articles