Category Archives : Tax Advise

Will be putting articles on how you could reduce your your tax liability here. Use the contact us form if you have any specific questions.


Capital Gains Tax Relief when selling your business – Incorporation Relief

Individuals have a number of reliefs from Capital Gains Tax. Some of the reliefs include Roll-Over relief, Incorporation Relief, Gift Relief and Entrepreneurs relief. The different reliefs have different conditions that need to be met attached to them so you will need to look at these first in order to determine if you are entitled to any of the above mentioned reliefs. The different reliefs also have different implications to your liability and a brief description of each of the reliefs is given below: Roll Over Relief – defers tax on chargeable gains when a person disposes of a qualifying business asset and buys another. Incorporation Relief – Applies when […]


Dividend Withholding Tax Rates for Different Countries Around the World – Foreign Stocks 4

Over the years, various studies have shown that investors tend to favour home stocks as opposed to foreign stocks. One of the reasons is that people are more familiar with companies that are based in their own country than abroad. As a UK investor, I would rather hold Uniliver in my portfolio over Clorox, or Royal Dutch Shell over Exxon Mobil. Whilst there is undoubtedly an element of home bias in favour of local stocks, I believe that one of the biggest deterrents in ownership of foreign stocks is taxes – in specific withholding taxes on dividends. What are withholding taxes and how do they work? A dividend withholding tax […]


Saving in A Pension (SIPP) VS a Lifetime ISA (LISA) for retirement? Which is better 2

With the recent introduction of the Lifetime ISA (LISA), the whole debate about whether to save and invest for retirement via a typical pension plan (SIPP) or LISA has erupted again. The main proponents for SIPPS say that is allows you to withdraw your money at an earlier age and it is particularly beneficial in a financial sense for higher and additional rate taxpayers. Advocates of the LISA on the other hand say that it offers more flexibility as it can be used to fund a property purchase and it also makes more financial sense for a basic rate taxpayer to save their money using this. Here, we look solely […]


The new UK dividend tax rules – £5000 tax free and no more dividend tax credits 3

The rules surrounding UK dividends have always mystified many people. The artificial dividend tax credit of 10% has caused confusion over the years and if you want to see why, just look at the post I did on the old dividend tax rules. But thankfully, the taxation of UK dividends changed as of the 2016/2017 tax year. The new rules which take effect as of 6 April 2016 are as follows: Each individual has a £5,000 tax-free dividend allowance. This means that no tax is paid on any dividend income earned below £5,000. If dividend income exceeds £5,000, the rate of tax they will need to pay on the amount […]


How Much Tax you Really Pay on a Purchase – Your Tax Rate is Higher than you Thought!

Apart from debt, on of the greatest stumbling blocks to building wealth is taxes. Don’t get me wrong, I do believe that tax is the price to pay for living in a civilised society. But the amount of tax we pay is way too high. Look at Corporation Tax for example, it is a tax on a tax on tax. Every company in a supply chain has to pay tax and this means that at every point in the supply chain, prices get jacked up by the current corporation tax rate of 20%. Look at the following illustration to see what I mean: If you go to a furniture store […]


What is the Lifetime ISA – Budget 2016 Announcement 1

In the just released budget statement, chancellor George Osborne has implemented a Lifetime ISA. The Lifetime ISA will provide a flexible way for people under the age of 40 to save tax free. With this lifetime ISA, people under the age of 40 can put money in and get a government bonus and use it to either buy their first home or save for their retirement. Here is how a Lifetime ISA works: From April 2017, anyone under the age of 40 will be able to open a Life time ISA and save up to £4000 each year. For every £4 you save, the government will give you a bonus […]


Capital Gains Tax Reliefs When Selling Business Assets – Roll Over Relief 3

Individuals have a number of reliefs from Capital Gains Tax. Some of the reliefs include Roll-Over relief, Incorporation Relief, Gift Relief and Entrepreneurs relief. The different reliefs have different conditions that need to be met attached to them so you will need to look at these first in order to determine if you are entitled to any of the above mentioned reliefs. The different reliefs also have different implications to your liability and a brief description of each of the reliefs is given below: Roll Over Relief – defers tax on chargeable gains when a person disposes of a qualifying business asset and buys another Incorporation Relief – Applies when […]


Should you pay Income Tax or Capital Gains Tax? Look at the 9 Badges of Trade

The government is cracking down on tax evasion. HMRC is increasingly looking into people not paying their fair share of tax. Just look at the articles showing HMRC going after ebay, Etsy and Gumtree sellers for proof of this. In a world where government tax authorities are going after every Tom, Dick and Harry to raise much needed finances it is important that you pay your tax in order not to be subject on any enquiries from the tax authorities. Whilst most people would like to pay their fair share of tax, the intricacies of the tax code make it difficult for you to assess how much tax you need […]


How the Rich Avoid Tax – Channel 4 Dispatches

The rich always seem to play by a different set of rules. And this is particularly true when it comes to tax. The rich seem to have a lower marginal tax rate than the majority. This is because they have the best advisors and tax planners on their side and thus can pay a rate of tax according to their ‘moral barometer.’ So how do the rich avoid tax? Trusts – There are a number of schemes that revolve around offshore trusts. One of the schemes is to set up an offshore trust, in particular the trust is set up in Belize. An offshore company is also set up to […]


The risks of over-taxing the rich in a progressive tax system

“The wealthy get all the tax breaks.” How many times have you heard that saying before? Probably more times than you could care to remember. Many people in today’s society think that the rich get all the tax breaks. But is this really the case? Consider the parable below first devised by Professor David R. Kamerschen of University of Georgia. The bar stool economics piece aims to show that people are too narrow minded when it comes to ‘big picture’ things like Tax breaks, and thus they make assumptions without knowing the true facts. Suppose that every day, ten men go out for beer and the bill for all ten […]