Capital Taxes
The Inland Revenue have setup a separate division,
known as IR Capital Taxes, to deal with some particular types of
taxes and all queries relating to them. These include:
- Capital Gains Tax (CGT);
- Heritage Assets; and
- Inheritance Tax (IHT).
Capital Gains Tax (CGT)
Capital Gains Tax are charged on capital gains, i.e. increased values,
and is only to be paid when an asset is sold by someone. Gains are
made when assets are sold for a higher value than they were purchased,
and it is only these gains which are taxed and not the entire selling
value. The two main situations where you would not have to pay Capital
Gains Tax is when an asset is either given to charity or is transferred
to a partner whilst legally married and living together. Assets
which are exempt from Capital Gains Tax include:
- Private cars;
- Cash (Sterling);
- Foreign currency held for personal use;
- Jewellery, paintings, antiques and other personal effects that
are individually worth £6,000 or less;
- Savings Certificates, Premium Bonds and British Savings Bonds;
- UK Government stocks (Gilts);
- Assets held in an Individual Savings Account (ISA) or Personal
Equity Plan (PEP);
- Betting, lottery or pools winnings; and
- Personal injury compensation.
To find out more about Capital Gains Tax and possible
exemptions, call the Inland Revenue. However, if you want us to
do the hard work for you, call Academy Accounting Ltd, and we can
help to work out what, if any, Capital Gains Tax you have to pay, as well as what
the paying arrangements to the Inland Revenue would be.
Heritage Tax
Exemption from paying Inheritance Tax can be claimed when the transfer
of assets involves qualifying heritage assets. If these assets are
tranferred into an approved trust fund, i.e. one established for
the maintenance of a qualifying heritage building, exemption can
also be claimed. However, in all cases, specific undertakings must
be done for such exemptions to become possible, such as allowing
public access to exempted assets. For all information on this, please
call us and we can lend a hand to make your life easier.
Inheritance Tax (IHT)
Inheritance Tax is chargeable when someone dies or when assets are
transferred to a discretionary trust or company, so long as the
estate (on death) or assets are worth more than the tax threshold
of the current year. For 2006/07, this limit is £285,000.
If Inheritance Tax has to be paid by someone, they must do so before
the probate registry issues a grant of representation. For grant
representations to be applied for, solicitors or other agents must
be used, and an Inland Revenue Account (IHT200) must be filled in.
However, very few estates need to fill these in. For help with such
forms, we can be contacted and provide you with all of the necessary
information.
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