Tag Archives : Tax Tips


Take These Steps To Enjoy A Tax-Free Retirement

The thought of being hit with hefty taxes when you enter you reach retirement is a bitter pill to swallow. But there are ways to legally reduce taxes in your golden years. You can actually generate a six figure tax free income if you start planning early and make use of the tax wrappers and allowances that are available. Here are a 5 steps to consider if you want to have a tax-free retirement. Step 1: Personal Allowance The first allowance to make use of is the Personal Allowance. Anyone earning less than £100,000 a year can earn £11,500 tax-free. In essence this means that the first £11,500 you receive […]


Transferring My Pension Between Providers – Options, Charges, Length of Time, SIPP 2

One of my new years resolutions has been to give my finances a spring clean. I started by looking at my pensions and found that one of my old stakeholder pensions was charging too high a fee. As readers of this site know, fees are a huge drag on performance and can cost you tens of thousands over time. I thus decided to move this all pension into a lower cost Self Investment Personal Plan (SIPP). In this post, I detail what options people have when transferring pensions, the process of transferring a pension, how long it takes and what assets you can invest in. Old Stakeholder Pension – Scottish […]


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 […]


Foreign Investors Should Prefer Share Buybacks Over Dividends

The two main ways companies reward shareholders is via dividends or buybacks. There has long been a debate about which of the two is better. Both have there advantages and disadvantages and that is why many blue chip companies use a combination of the two. Buybacks Vs Dividends Dividends – When a company pays a dividend, it is essentially giving a share of its profits to its owners/shareholders. Dividends are usually paid at regular intervals and the best blue chip companies grow their dividend over time. Buybacks – A share buyback refers to the purchase by a company of its shares from the marketplace. As a result of a buyback […]


If you want to buy US listed shares, fill out a W-8BEN form (American stocks for foreign investors) 1

The rise of online platforms over the past decade has been great. From HL, to Youinvest, to interactive investor, these platforms allow individual investors like you and I to buy shares all over the world for a reasonable price. With this easy access to US, European and Asian stocks, many people forget to do research on how the system in these overseas countries works in a different way to ours. One example of this is Dividend Withholding Tax (DWT). If you buy shares in a foreign company, the dividend you receive from that company will be subject to DWT. This means that as a foreign investor, you do not get […]


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 […]