The Tax Preparation Blog

Posts Tagged ‘rules’

Question: I’m thinking of selling a flat, can someone help me out please?

Hi, at the moment my mother has got a flat in the UK, it is not her primary residence, and is planning on selling it. It was worth 30,000 when it was bought, and is now worth 150,000.
What are the taxes that would be enforced if she goes ahead and sells it? Assuming it would be 40% of 120,000 (CGT-18% and income tax-22%?), could this tax be avoided if she gives it to me (also are there any taxes involved with gifts?), considering that it has been my main home for the last 10 years? Also are there any laws/taxes against selling gifts almost straight after they where given?
Thank You in advance

Answer: If she sells it she would pay 18% Capital Gains Tax (no Income Tax). The annual exemption for CGT is £9,600 for 2008-09 so, if the flat is her only disposal, the taxable gain would be 150,000 – 30,000 – 9,600 = £110,400. The CGT payable would be 110,400 x 18% = £19,872.

If she gives it to you it would be treated as a disposal at market value and she would have to pay CGT as above.

Has the flat ever been your mother’s main residence? That would reduce the CGT bill.

In addition, if your mother gives the flat to you and she dies within 7 years of the gift then the value of the gift will be added to the value of your mother’s estate and if this total exceeds the Inheritance Tax threshold (£312,000 for 2008-09) there may be additional Inheritance Tax to pay.

No problem with selling gifts immediately they have been received.

Goldman Sachs Keeps UK Options Open

Goldman Sachs announced its serious consideration of various alternatives to prevent the UK’s new 50% super-tax on bonus payments of companies.

Thomas Burridge interview – UK Libertarian Party (LPUK) : part 1

Question: taxes for hostess work – trade fairs?

Hi, I work for a PR/event agency based in Italy/Switzerland; we have been asked to organize an event for a pharmaceutical company at GASTRO 2009 (London Excel Trade Fair, November 2009). It is the first time we work in the UK and we are not familiar with the UK tax system.

We are going to hire local staff – more specifically 3 hostesses, 2 receptionist etc for five days.

Can somebody help us:

If I pay each person £ 100 per day, I suppose I will receive a payment receipt.

Will they then carry out all the tax compliance matters and pay taxes on the amount we have paid them? Or is it up to us?. Up to what percentage will the taxes amount, if the income before taxes is £ 100,00 per day?

We would like to be abiding by the rules, but it is not easy to find reliable information ….

I thank you in advance.

Answer: If you give them a contract to sign on the basis that they are self employed they should take care of their own taxes and if they do not it is their responsibility. Below is a link to the government tax office web site. Have a look through there to see what you can find.

National Savings Bonds Rules, 2009 notified

KARACHI (January 06 2010): The government on Tuesday notified National Savings Bonds Rules, 2009. In a notice sent to Karachi Stock Exchange (KSE), it has been stated that these rules will be called National Savings Bonds Rules, 2009 and come into force at once.

Why PAY Income Tax? (Pt 11 of 11).