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Greene & Greene is a long established firm of solicitors based in Bury St Edmunds, Suffolk. Our lawyers advise individuals and businesses based all over the UK.

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Entries in Tax Planning (6)

Wednesday
Sep062017

Taxing times...

Anyone looking to invest in property as either a second home or a buy-to-let since 1 April 2016 will no doubt be aware of the additional 3% Stamp Duty Land Tax ("SDLT") rate on the purchase of an additional dwelling.  However, SDLT is not quite all doom and gloom, as there are situations when the additional rates will not apply, and reliefs are available in certain circumstances which can reduce your SDLT bill with HMRC.

For example, if a buyer is looking to acquire two or more dwellings in a single transaction, then “multiple dwellings relief” may be available to reduce the overall SDLT liability.

Rather than applying to all “properties”, the additional rate is levied on the purchase of a “dwelling”.  What the man on the Clapham Omnibus would regard as a “dwelling” is not the same as HMRC, and often an analysis needs to be carried out in order to make a determination.

Also, the additional rates are only applicable when a buyer is not replacing his or her main residence. HMRC takes "replacing" to mean that there has been a disposal and acquisition.  Therefore, where a buyer acquires a new main home, but has not disposed of their previous residence, he or she will be initially caught by the additional 3% rate.  However a refund for the additional tax paid can be claimed from HMRC if the previous main home is sold within a three year window. 

If you have any questions in relation to SDLT, please contact Natalie Stoter on nataliestoter@greene-greene.com or 01284 717462 (Direct). For more information on the services offered by Greene & Greene Solicitors please visit www.greene-greene.com and follow on Twitter @GreeneGreeneLaw

This article first appeared in Issue Five 2017 of Bedfords Review

Wednesday
Feb152017

Reforms to the Taxation of Termination Payments

Often an employer will pay a lump sum to an employee on severance of the employee’s contract, commonly known as a “termination payment”.  Historically how such termination payments are taxed has often caused confusion for employers, employees and their advisors.

Following an HMRC consultation in summer 2016, draft legislation was published in the 2016 Autumn Statement reforming the taxation of termination payments.  The changes (which will apply from 6 April 2018) have been introduced by the UK government in order to simplify the taxation of termination payments and close those loopholes in the existing legislation that incentivise employers to structure arrangements in a manner in order to minimise income tax and National Insurance Contributions (NICs).

The key proposals are as follows:

1.  £30,000 tax free threshold 

  • Current legislation states that employees may receive the first £30,000 of any termination payment free of income tax and NICs.
  • As of 6 April 2018, employers are required to account to HMRC for employer NICs liability (currently at a rate of 13.8%) on any termination payments over and above the £30,000 tax free amount. 
  • This measure is clearly aimed as a deterrent for employers to structure their payments which should be treated as “earnings” as termination payments in order to avoid an employer NIC charge.  Employees will continue to benefit from the employee NICs exemption for payments associated with the termination of employment.
  • The draft legislation does not outline the way in which the employer NIC will be collected.  However, HMRC has stated in its policy paper for the draft legislation that it is anticipated that the charge will arise and be paid in “real time” rather than at the end of the tax year in which the payment is made.

2.  Payments in lieu of notice (a “PILON”) 

  • Under current legislation, the taxation of a PILON can vary depending upon its nature, for example, a PILON can be contractual or paid as damages for loss of notice. 
  • Irregularities in the legislation have meant that in certain circumstances, PILONs have been regarded as “earnings” for tax purposes, and therefore able to fall within the £30,000 tax free exemption received in connection with the termination of employment.
  • In order to simplify the legislation, from 6 April 2018, all PILONs will be treated as “earnings” and will be subject to income tax, employer’s and employee’s NICs, no matter how the employee’s employment contract is drafted or whether payments are structured in some other form, such as damages.

If you have any questions in relation the taxation of termination payments, please contact Natalie Stoter on nataliestoter@greene-greene.com or 01284 717462 (Direct), or in relation to termination payments more generally, please do not hesitate to contact a member of the Greene & Greene employment team visit www.greene-greene.com and follow @greenegreenelaw

Monday
Aug012016

Estate Planning Workshops 2016

Greene & Greene regularly hosts a series of workshops and seminars on current legal issues. These always prove popular with clients and fellow professionals. The seminars are free to those who have registered their places in advance.

This year we will be presenting the following Estate Planning Workshops:

  1. Tax and Residential Property – Downsizing, Surcharges, What Next? – Tuesday, 13 September 2016 at 8:00am (Denny Brothers’ Conference Rooms, Kempson Way, Bury St Edmunds)

    Wayne Perrin (Private Client) and Jonathan Mathers (Agricultural and Residential Property) will look at the broad range of taxes from a residential property perspective including:

    • Inheritance Tax - the residential nil rate band and the downsizing proposals one year on; are we any clearer?
    • Capital Gains Tax – how the new rules (do not) affect residential property;
    • Income Tax – the changes in the deductibility of mortgage interest; and
    • Stamp Duty Land Tax – the new surcharge rules; when they apply and when they do not.
  2. Whose Will is it Anyway? – Tuesday, 18 October 2016 at 8:00am (Denny Brothers’ Conference Rooms, Kempson Way, Bury St Edmunds)

    Introduced by Wayne Perrin (Private Client) and with the main session including Kate Chandler (Contentious Trusts and Probate), Martine Swaep (Private Client), and Ben Fox (Contentious Trusts and Probate).

    The decision in Ilott v Mitson (currently referred to the Supreme Court) brought into the public eye the ability to “interfere” with a person’s Will. This caused a large degree of consternation in the English media, with some commentators even expressing the view that there was no longer any point in preparing a Will. In this session attendees will be given the chance to sit in judgment on a (fictional) disputed Will case. This promises to be a lively and entertaining debate.

    For further information on the above estate planning workshops, please click here.

Thursday
Aug152013

Louisa Bradberry joins Greene & Greene’s Probate and Taxation Department

This article first appeared in the East Anglian Daily Times on 13th August 2013.

 

Greene & Greene Solicitors in Bury St Edmunds have appointed Louisa Bradberry to its Probate and Taxation Department. 

Louisa was raised and schooled in Suffolk. After qualification she worked in Cambridgeshire until 2009 when she took time out to raise her family. She is glad to be back in the county she considers to be home. Louisa said “I am very happy to have joined Greene & Greene. They have a wonderful department and reputation and I am pleased to be working with some highly respected members of the profession back in the area of law that I love”. 

Louisa specialises in probate administration and the drafting of wills and therefore has direct experience of both the planning prior to and the process following a death. She prides herself in treating clients with compassion and understanding during what is often a difficult and stressful time. 

The Probate and taxation head said: “Louisa brings both further experience and practical knowledge that we know our clients appreciate.”

Louisa Bradberry, a solicitor in Greene & Greene’s Probate and Taxation Department, can be contacted on 01284 717432 or louisabradberry@greene-greene.com.

 

Tuesday
Aug212012

Inheritance tax planning

From birth to death, and increasingly, nearly every event in life is a taxable event.  There are, however, a number of simple strategies anyone can put into place themselves to avoid paying unnecessary tax.  Suzanne Alston, a dual qualified solicitor and chartered tax adviser, answers the most common questions which arise in relation to inheritance tax.

Can I give away assets during my lifetime to reduce the Inheritance Tax liability, and, if so, how much? Yes, but the first questions should be, “is this the right time?” and “how much is safe?” 

For gifts between individuals, the figure which is “potentially exempt” is limitless.  If you survive the gift for seven years, it will be exempt.  However, if you die within that period, the gift is added back into the death tax calculations.   If you survive between three and seven years and tax is payable on the gift, the tax bill tapers away.  So despite the uncertainties it is still well worth giving, if you don’t need the money. 

Are any gifts completely exempt from IHT? Yes, three types of gift are exempt even if you don’t survive for seven years:

1. If the total of one individual donor’s gifts do not exceed £3,000 each year (6th April to following 5th April) they will be exempt from day one. 

2. In addition, one individual can give up to £250 to as many individual donees as he/she wishes.  Again these will be exempt as of day one.

3. Gifts given in contemplation of marriage (£5,000 from a parent, less from more remote relatives).

Cumulatively, these reliefs are very effective and if you don’t feel you can afford the gifts in any year, you don’t have to make them.

Year on year I am not spending all of my income.  Is there something I can do? You can give away surplus income each year but you need to establish a pattern of giving, and document it preferably at the outset.

My biggest asset is my home.  Can I give this to my children and continue to live there? Broadly speaking; no.  If you take a benefit from property given away, such as continuing to live in it, you will be treated as though you still own that asset up until the date you die. 

Is there any general advice you would give to people considering lifetime gifts? You need to think about other taxes on gifts of assets such as Stamp Duty Land Tax on property, Capital Gains Tax, Income Tax and sometimes VAT.  It is worth incurring a professional fee in setting up a strategy which suits you personally.  After that, the key to success is (a) keep good records; (b) keep it simple; (c) keep it under review.

If you would like to find out more about tax planning and asset protection contact Wayne Perrin on 01284 717454 email wayneperrin@greene-greene.com

Article published in East Anglian Daily Times, Business Monthly, 21 August 2012

Tuesday
Jul052011

Picking a way through the tax maze

Solicitors Greene & Greene have been based in Bury St Edmunds since 1893. Their clients include Suffolk families and businesses that look to the firm to reduce their tax bills and to protect their assets. One tends to think of tax advice as a shady world involving offshore companies and unbelievably complex arrangements, but that is not the case.

Click to read more ...