Member Since: 15th Mar 2000
27th Jan 2016
Different rules applied
A case of different government (or local government) departments making up their own rules when one set of rules could be applied to all situations. Needs someone in central government to knock some heads together and tell them all to use one rule book.
20th Jan 2016
Thanks for your help.
19th Jan 2016
I have to say that I tend to advise clients to keep all receipts even if they are on the mileage basis, just on the grounds that you never know what might happen.
12th Nov 2014
Thanks for those answers
With regard to using the company as an investment vehicle, I can certainly see that that could work but the annual accountancy fees etc. for the company would be a disincentive. As you say, if the amounts involved were larger (and if the client was a higher-rate taxpayer) it might be useful but I don't think he'd want to keep his money tied-up longer than necessary.
Turning to CT relief on the contribution, I didn't expect any relief at this stage. With hindsight (or should I say with forethought?) we should have done this (the contribution) while the company was trading and any loss in the last year could have been carried back for CT purposes. Now, without a trade, I assume that a trading loss to carry back is out of the question so there would be no relief for the payment.
But does that stop you paying it? Knowing that there was some sort of calculation of maximum company contributions in the past which always seemed too complicated to even try to understand, I've always made the assumption that there needs to be some remuneration being paid at the time in order to justify payment of pension contributions. But under the new rules maybe that's not necessary? Maybe the company can pay in what it likes when it likes? The only restraining factor being that in most cases you would wish to get CT relief on the contribution.
If there's nothing to prevent the company from making the payment (being resigned to getting no CT relief on it) would it still be worthwhile paying a contribution? 25% of it should come back as a tax-free lump sum and in view of the client's age (>70) that could be immediately afterwards.
If the client then takes an annuity he will of course have to pay tax (basic rate in this case) on the capital he'll receive as part of the pension. Clearly, not having had any tax relief on the contribution into the pension fund, paying tax on getting the same money back wouldn't be a good deal.
But what about the new rules, coming in soon, which enable one to take all the money back instead of buying an annuity? What tax is payable on that? If it's tax-free it might be worth doing. But I fear I'm being rather optimistic in thinking that there'd be no tax payable? Unfortunately I can't remember what the proposals are in this regard. I'll have to go and look them up.
14th May 2014
My feeling is that if the property is owned jointly then both parties are entitled to some of the income and each must declare her share. If it's joint tenancy (rather than tenancy in common) then the shares of income will be 50/50 and the property will pass automatically to the survivor when one dies. The value of the share would have to be included in the estate however for IHT.
Form 17 doesn't apply (to declare the respective entitlements to income) as that only applies to husband and wife.
So the true beneficial interests will determine who is entitled to what income.
You might use a declaration of trust to change things but that would simply result in the ownership being a tenancy in common I think - i.e. it would change the entitlements and the way in which the property passes on death.
I don't claim to be an expert but I hope that helps.
12th Jan 2011
Loss of personal allowance
Actually there's an article from ACCA's Accounting & Business magazine which you can find on their website at http://www.accaglobal.com/members/publications/accounting_business/CPD/marginal_tax
This illustates the way pension contributions can reduce the tax in these circumstances, obtaining an effective marginal rate of relief of 60%.
12th Jan 2011
I assume this stands for Ordinary Branch. This I think applies to life policies etc. (not general insurance) and distinguishes "ordinary business" from "industrial branch" policies. The latter are small value policies sold door-to-door as opposed to ordinary branch business where the premium is paid by D/D mostly.
I don't think there are any tax inplications in the OB designation.
I have to say I'm not an expert on these things.
11th Jan 2011
Thanks for your reply. I was a little reluctant to assume that the tax position on the 2009 scrip dividend was exactly the same as what they're proposing now. However maybe I'm worrying too much?
27th Jul 2010
I did suggest to my client that it was unlikely that the subsidy would be received tax-free whilst a deduction would be given for the costs incurred, but he's an optimist and felt that there wasn't much point in the subsidy (nor indeed in the scheme itself) if the subsidy was "taken away again" by having it taxed. Being a government scheme, there is always a slight possibility that it won't be taxable I suppose - as with the PAYE Online Filing Incentives for example. I said I'd see what I could find out. (As you do sometimes)
11th Feb 2007
One other thought about the BIK aspect
Whilst on the subject of a company using an asset owned by its director(s), this point has been in my mind in relation to a situation where freehold business premise owned by a director are used for business purposes by his company.
If the company were to carry out and pay for work to the premises which improved and therefore enhanced the value of the premises (i.e. not simply repairs), presumably this would be a taxable BIK for the director?
Anybody had any experience with this? It can't be all that rare - especially if the company is VAT registered and can therefore claim back the input VAT on the costs whereas the director wouldn't be able to do so without electing to tax the rent (i.e. the mortgage payments paid on his behalf by the company which are treated as rent paid to him).