Tag Archives : Tax Advise


Gift Relief on Shares in a Business – Capital Gains Tax

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 […]


Pensions and Death Taxes – How It Works As An Inheritance Planning Tool

In the years gone by, death used to be followed by a huge 55% tax hit on any money you left behind to your loved ones. However, rules introduced last year mean it is now possible to pass on your entire pension pot to your beneficiaries, tax-free. ‘In this world nothing can be said to be certain, except death and taxes.’ Benjamin Franklin How Passing On Your Pension Tax Free Works If you die before the age of 75 and have a Self Invested Personal Pension (SIPP), you can pass on your entire pension fund to your beneficiaries tax free. The money can be passed down as a cash lump […]


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 […]


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 […]


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 […]


Determine your Tax Residency using Statuary Residency Test 1

Residency is an important concept in tax. This is because you pay tax depending on where you are resident (and domiciled) as seen by the post “ Should you pay Tax in the UK on your income?”. In short, If you are resident and domiciled in the UK, you pay tax on the arising basis . This means you will have to pay tax in the UK on any income earned throughout the world. If you are resident but not domiciled in the UK, you pay tax on the remittance basis. This means you will need to pay tax in the UK on any income earned in the UK and […]


Should you pay tax in the UK on your income? 1

As an individual, your tax liability in the UK depends on your residency and domicile status. Your residency is where you live permanently or on a long-term basis. For tax purposes, your residency is determined by the Statutory Residency Test. You can read all about the Residency test in an article I wrote here so that you can determine if you are resident for Tax purposes or not. Your domicile is normally your country of origin or where you were born. If you are resident and domiciled in the UK, you pay tax on the arising basis . This means you will have to pay tax in the UK on […]


Tax on UK and Foreign Dividend Income 9

How dividends are tax for UK residents can be a tricky subject for many, but here I will explain how both UK and Foreign dividends are treated for different tax bands. This post relates to the old dividend tax rules that involved a tax credit. For the new tax rules on Uk dividends which took effect on 6 April 2016, see the following post: http://moneygrower.co.uk/2016/04/the-new-dividend-tax-rules-5000-tax-free-dividend-tax-credits/ If you want to see the dividend withholding rates deducted by different countries, have a look at this post. UK Dividends Many people have the assumption that when dividends are paid, tax is already deducted and you will not have to pay any more taxes. […]


2015/16 Tax Rates and Allowances

With the new tax year starting this past Monday (6 April 2016), new tax allowances and rates have come into effect. This article briefly summarizes these new allowances and rates that are effective for the tax year 6 April 2015 – 5 April 2016. Tax Rates Basic rate income tax : 20%.   (Paid on earnings between £10,600 and £42,385). Higher rate income tax: 40%. Additional rate Income tax: 45%. To read more about income tax, click here. Dividend ordinary rate: 10% (Paid by basic rate taxpayers). Dividend upper rate:  32.5% (Paid by higher rate taxpayers). Dividend additional rate: 37.5% (Paid by additional rate taxpayers). Read more about dividends here. Capital […]


ISA Allowance Used Up? No problem, Here Are Other Ways To Help Save Tax Free! 4

As the last date (5 April) to put money into this current years ISA fast approaches, many people are scrambling to top-up their ISAs. Most advice that is available is for those people who still haven’t used up all their £15,000 ISA allowance. But what if you have used up all your allowance but still want to invest tax free. In that case, this article is for you. There are 3 other ways, apart from an ISA, that you are able to invest and shelter your money from tax: 1) Capital Gains Allowance – Many people don’t know about the capital gains allowance. With this, you can make gains of up […]