inheritance tax

August 15, 2019, 12:36 pm

≫ Next: US RSUs and Tax - Self Assessment

Hi all,

we need to get deeper into the retirement planning, I've recently had a news letter from our IFA, that talks about £3k per year for our kids ( kid in my case), I'm trying to get my head round it a wee bit, is this £3k a year from our pensions ? and do we pay tax on them when we withdraw our pension ?

so for eg

£12k a year tax allowance, can we draw down £15k and use £3k for our son and not pay tax on it? so £15k draw down but not paying any tax ? or is it the 12k free from.tax and we would pay tax on £3k so approx 600 in tax ?

the IHT is £325k just to check, this includes pension saving etc , but not the first £150of the house, going up to £175k soon ? so if husband dies his pension transfer to me and his half of home value etc would be taxed on anything over £500k and when I die the remainder over the value if £325k is taxed ?

just trying to understand it here so I can work stuff out

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US RSUs and Tax - Self Assessment

August 15, 2019, 8:29 pm

≫ Next: Negative tax free amount

≪ Previous: inheritance tax

Hi

Hope you are well. I work for an American company and have done since March 2016, I was awarded Restricted Stock Units at the time and also filled in an W-8BEN (Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding) and a number of them vested in 2018-2019. I did not sell any of the shares - they simply vested. Part of the vesting meant at least half of those shares were sold off to cover US taxes and NI contributions (2%) and Employer NI (13.8%) . My P60 for the year reflects my base salary as well as the vested shares as one single amount for the year.

Filling in my self-assessment I expected an area where I can "Declare" the RSU value versus the base salary value and therefore started to fill in the "Foreign Income" section of the HMRC assessment. I have been advised by the HMRC that this is not required as the figures are already covered under payroll (P60) and therefore should be entered as per the P60 into the "Employment Details" section.

I cannot help but thinking that I am being "Double-Taxed" in this scenario as I had already paid US taxes on the amount when vested (hence the sold of shares) - and now I am being taxed a t a higher rate (lost my tax free allowances) due to the vested share amount having been bundled in with my base pay (which alone does not push me into the "loss of tax free allowance realms").

Any guidance here appreciated

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Negative tax free amount

August 16, 2019, 12:23 am

≫ Next: Captial Gains Tax - on Estate property

≪ Previous: US RSUs and Tax - Self Assessment

I earned over 100k last year, submitted my self assessment and actually got £1300 back. Now I received a letter from HMRC saying that my tax code is OTX and my total tax free amount is £-2. I am not sure I understand what it means for me.

They also listed personal pension relief of £2500 - I paid this amount last tax year, why do they include it in this year calculation?

Do all people who earn more than 100k get zero tax free amount at the start of the year and then claim back tax via self assessment in case they made contribution such as pension?

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Captial Gains Tax - on Estate property

August 16, 2019, 8:17 am

≫ Next: HMRC Tax Rebate Stolen

≪ Previous: Negative tax free amount

I have recently sold my late parents house as Administrator of their Estate. Probate was applied for 4 years after their death, but it has been 15 years since their death. I have yet to distribute the Estate. My brother and I are the sole beneficiaries.

My brother has lived in their house before and up until the house was sold in March 2019.

There is a gain on the property. Is it the responsibility of the Administrator to pay the Capital Gain Tax from the Estate and then distribute the remaining monies?
Or
Is it the responsibility of the beneficiaries to pay their own Capital Gain Tax?

As my brother has been living in the property as his main residence, is there any tax exemption for him?

The house was never in his name. It was sold in the names of my parents.

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HMRC Tax Rebate Stolen

August 16, 2019, 1:44 pm

≫ Next: is this possible ... and legal

≪ Previous: Captial Gains Tax - on Estate property

Hi, I wonder if anyone can help with some advice? My son in law has recently become self employed sub contracting and having a certain percentage automatically deducted from his wages by the company accountant. He was then told he had overpaid and HMRC were going to refund him £1400. He waited and waited for his cheque, the he finally rang HMRC to be told it had been sent to a tax claim company acting in his behalf. He knew nothing of this and asked HMRC for proof that he had authorised this. They sent him a form signed in April 2019 with a clearly forged signature. They have now told him they can do nothing and to get in touch with the company. Of course the company cannot be contacted and have a P.O. Box as an address. He has reported it to the Fraud department but they said all they can do is investigate but they can't get his money back. Surely this cannot be right? HMRC should be liable shouldn't they?

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is this possible ... and legal

August 17, 2019, 3:19 am

≫ Next: Tax refunds on pension lump sums

≪ Previous: HMRC Tax Rebate Stolen

Hi all,

as previously noted I'm starting to look at IHT which leads me onto tax ( or the other way around) whilst working out the £3k a year gift and its tax implications I started re thinking about ways in which we could sort ourselves our better tax wise for retirement. this is something we will discuss with our IFA but I wanted to get opinions, suggestions etc first so that we can have a better handle on the situation before going for our meeting.

We are a wee bit away from retirement just now ( husband 52, me 47) but we intend on retiring at 60,55 so less than 8 years, husband has a good pension which will mean he will be liable to pay tax on retirement at 60, my pension will be small in comparison ( about £150k)

I was wondering if it is possible that when husband reaches 55 he starts drawing down on his pension gifts it to me and I can then put it into my pension ( thus cancelling out the tax implications) so that when we do retire 5 years later and do eventually draw down on our pensions for good husband will pay less tax as he will have transferred ( approx) £60k to me ?

we plan on drawing down roughly 4% ( I know that's a bit too high to draw down in todays money ) I will only have £6k without husbands gift per year, with gift I would have roughly £8k a year, still not enough to pay tax on, husband will still have a pension of roughly £20k a year instead of £22k a year so we would still have the same money coming in but be paying less tax on £2k a year, roughly £400 a year saving.

Is this possible and legal ?

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Tax refunds on pension lump sums

August 18, 2019, 3:50 am

≫ Next: Private Residence Relief and Lettings Relief - CGT

≪ Previous: is this possible ... and legal

I have recently cashed in a pension and an advert from pensionstaxrebate keeps coming up on facebook claiming you can claim back a tax rebate off your lump sum. It says it is recommended by trust pilot but dont like going ahead with these sites unless I can find out more info.
Has anyone had dealings or even if its true

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Private Residence Relief and Lettings Relief - CGT

August 18, 2019, 9:22 am

≫ Next: I cant access my self assessment !

≪ Previous: Tax refunds on pension lump sums

I would appreciate a sanity check on calculations below

I am also struggling with applying PRR and LR as a married couple and in what order to do the calculation. In particular, LR seems to be per individual and PRR per property, so does that mean that LR is effectively applied twice and PRR once to the combined gain?

Calculation is as follows. I split the gain after applying PRR, to then apply LR to each persons gain, this is the bit I am not sure is correct?

OWNED 4762 days
LIVED 334 days
LET 4293 days
Empty until sold 134 days

GAIN £ 35,000

COSTS
BUYING
Stamp Duty £ 1,600
Solicitors £ 685
Survey £ 290
SELLING
Solicitors £ 480
Estate Agent £ 2,106
TOTAL COSTS £ 5,161

NET GAIN £35000-£5161=£ 29,839

RELIEFS
PRIVATE RESIDENCE RELIEF
((334+18m)/4762) x £35000 = £ 6,423.77

Remaining Gain £29,839-£6,423.77=£ 24,362.16
Individual Gain £24,362.16 / 2 =£ 11,707.43

LETTING RELIEF
(4293/4762) x £35,000 =£ 31,552.97
Lowest of the 3 limits (PRR, LR, £40k) is PRR = £ 6,423.77
Remaining Gain £11,707.43-£6,423,77 = £ 5,283.66

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I cant access my self assessment !

August 18, 2019, 9:26 am

≫ Next: Teacher pension scheme, higher rate tax & child benefit help!

≪ Previous: Private Residence Relief and Lettings Relief - CGT

Joined: Sat Aug 17, 2019 5:06 pm
Contact:
I cant get access to self assessment. HELP !
by CD31 » Sat Aug 17, 2019 5:15 pm

I have posted this on numerous sites now with no answers or no one knowing what to do. I tried logging into my GOV.UK account to file a tax return and I entered the government gateway Id and password correctly but then its asking me for an access code. It says to get the access code to download the HMRC app and find it there. Ive done that but no code appears. It asks me to scan a QR code or to get another code I need to log in to my account and go to my settings, but I cant access settings as every time I log in Im required to enter this access code. I phoned HMRC and they told me to provide them with a mobile number to send a code to once Ive entered my government gateway ID and that I should wait an hour before trying. The code they send me should work. I waited 2 hours, logged in but it still says I need to go to the app to get the code and I havent received any text message with any access code. I rang them again and they told me to wait a few more hours as it could still be updating. Did this and still no joy, so Im in this endless loop of signing in, going to the app , to then be re directed to the login etc. I rang HMRC again and they literally have no clue what to do and told me I probably wouldnt be able to access it if I wasnt receiving a text with a code. So what on Earth do I do now? I cant get access to my self assessment but Im sure they would fine me if i didnt submit a return. I just dont understand why the process is so complex. If I go to an accountant would they be able to get access to file my taxes for me me using their own Methods or will I still need this access code to give to them ? Any help is seriously appreciated as Im losing my marbles here

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Teacher pension scheme, higher rate tax & child benefit help!

August 19, 2019, 6:07 am

≫ Next: WHSmith blames 'stock error' after selling tax return guide with 2015 info - MSE News

≪ Previous: I cant access my self assessment !

Hi,

I am due a salary increase which will take my salary to £51k.
The teachers pension scheme means I pay 10.2% contribution before my income is taxed (£5100).
Does this mean my 'actual' salary will be £46k so I wont pay higher rate tax? Also does this mean our child benefit wont be affected?
Thanks!

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WHSmith blames 'stock error' after selling tax return guide with 2015 info - MSE News

August 19, 2019, 8:00 am

≫ Next: N London accountant recommendation

≪ Previous: Teacher pension scheme, higher rate tax & child benefit help!

WHSmith is to stop selling a book that gives readers outdated guidance on how to fill in their tax return, after a sharp-eyed employee of an accountancy professional body spotted it was based on the rules for 2014-2015...

Read the full story:
'WHSmith blames 'stock error' after selling tax return guide with 2015 info'

Click reply below to discuss. If you havent already, join the forum to reply.

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N London accountant recommendation

August 19, 2019, 11:13 am

≫ Next: HMRC rules Re claimable business journeys

≪ Previous: WHSmith blames 'stock error' after selling tax return guide with 2015 info - MSE News

My sister lost her husbandlast year and nowreceives50% of hispension on top of her income, and also inherrited a renatl property generating income.

She's never done a tax return before but will now have to, and is looking for an accountant to help her, at least the first time.

Any recomendations in North or North West London?

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HMRC rules Re claimable business journeys

August 20, 2019, 1:06 am

≫ Next: Working abroad / UK Tax

≪ Previous: N London accountant recommendation

Quick query regarding allowable travel expense for employment purposes.

Worker travels 25 miles to their permanent place of work daily. I understand that this is considered a normal commute and never claimable.
On a different day they are required to attend a different work location which is 10 miles from their home. They spend 2 hours there undertaking their work, before then travelling to their permanent office.

Is the journey between the first business call and their permanent office claimable? I understand that this journey is considered to be in the performance of their duty as their work day has already started as a result of the requirement to attend at the first work call?

Or is the scenario one where there is no legitimate claim as the 25 miles have always to be deducted first? i.e you could undertake multiple business journeys throughout the day and still be under the 25 mile distance and therefore none of these journey are subsequently claimable?

Any help on this would be greatly appreciated.

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Working abroad / UK Tax

August 21, 2019, 5:55 am

≫ Next: US EMI Stock Option - how to fill in W8-BEN form

≪ Previous: HMRC rules Re claimable business journeys

I am a British citizen working abroad as a contractor. I own a Partnership/Business with my spouse & we are both Self Employed. We complete 3 Tax returns every year with HMRC. Aside from working in Europe for 2 months this summer, our business is mainly in Japan. We pay Japanese Taxes out of our monthly pay check when we are out there working, companies make payments to our UK Business Bank account. My question is, if the Tax is being deducted in Japan are we required to pay UK Tax when we are not earning & working in the UK? Any advice would be greatly appreciated.

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US EMI Stock Option - how to fill in W8-BEN form

August 21, 2019, 8:49 am

≫ Next: Ill health payment taxable????

≪ Previous: Working abroad / UK Tax

Hi,

I am leaving the company and am exercising the share options.

According to the Stock Options Agreement the shares are EMI qualifying shares.

"If designated in the Notice of Stock Option Grant as an EMI Qualifying Option ("EMI Option"), this Option is intended to qualify as an Enterprise Management Incentive Option ("EMI") under Schedule 5 . Nevertheless, to the extent that it does not qualify as an EMI option under Schedule 5, , this Option shall be treated as a UK Non-Qualifying Option (Unapproved Option)."

Schedule 5: https://www.taxworld.co.uk/income-tax/itepa-2003/schedules/schedule-5-enterprise-management-incentives/part-5-requirements-relating-to-options/

I am having troubles filling in the W8-BEN form, that is Part II; Point 10.
https://www.irs.gov/pub/irs-pdf/fw8ben.pdf

Should I specify the article and paragraf and % rate or leave it empty. If the former, then which article and what % rate?
I read the treaty, but cannot find a relevant article to my situation.
https://www.irs.gov/businesses/international-businesses/united-kingdom-uk-tax-treaty-documents

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Ill health payment taxable????

August 21, 2019, 10:05 am

≫ Next: Tax on regular gift money?

≪ Previous: US EMI Stock Option - how to fill in W8-BEN form

I have been awarded 2 years salary from my employer as i am unable to continue doing my job due to health reasons, am i liable to pay income tax on this ill health payment? TIA PS I am 60 years of age.

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Tax on regular gift money?

August 21, 2019, 9:09 pm

≫ Next: Additional pension contributions - 40% tax threshold and company car BIK

≪ Previous: Ill health payment taxable????

So my grandmother just sold her bungalow and is moving in with my parents soon.

Due to her having considerable money, two private pensions, and state pension, it is her wish for her remaining years to start giving me £500 a month to make my life easier, possibly rising to £700 after some time.

I protested but she will not have it any other way!

I own my home outright, have a simple management job earning £26k a year, and Im single.

What is my responsibility regarding tax on this? My understanding is that if it amounts to over £3k in a single year, then I will have to pay inheritance tax on it should she pass on within 2 years of receiving it... or something like that.

Also, this will mean my savings accrue faster, but am I free to invest the money in a property or any other type of investment given this arrangement?

Many thanks!

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Additional pension contributions - 40% tax threshold and company car BIK

August 22, 2019, 10:34 am

≫ Next: inheritance from abroad.

≪ Previous: Tax on regular gift money?

Hi everyone
My first post in the MSE forums. I have found other threads but I'm not sure they answer my specific questions. That said I am not in a unique position so it may be I haven't found the right thread.

I am lucky enough to be in a reasonably well paid job with a company car. I have also been issued some RSU's through my firm (US corporation). I believe all of this now brings me above the £50k threshold to pay higher rate tax. I'm not averse to that per se, but with a company car the BIK literally doubles. I have not paid much attention to my tax rate before so here goes.

I am already making additional pension contributions but by the end of the year I believe my pay (after salary sacrifice pension) and benefits will be as follows:

Salary circa £44k
Car bik £7k @40% tax, or £3.5k @20% tax
Rsu £4k gross
Total £55k

My question is: if I make an additional pension lump sum payment of £5k, to bring me under £50k would I receive a rebate for the car bik and the salary & Rsu? If so, how do I calculate the value of the rebate?

Many thanks as I try to get to grips with personal finance properly.

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inheritance from abroad.

August 22, 2019, 2:50 pm

≫ Next: Transferable Nil Rate Band

≪ Previous: Additional pension contributions - 40% tax threshold and company car BIK

I will need to get proper HMRC advice, but wondered whether anybody knows the tax position of a foreign bequest from a non-dom. The country itself doesn't have IHT but will there be UK tax to pay?

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Transferable Nil Rate Band

August 23, 2019, 1:11 am

≫ Next: Tax on accumulation bonds

≪ Previous: inheritance from abroad.

I understand that if a parent dies and leaves everything to their spouse, there is a transferable nil rate band. What I don't understand is when it is claimed. I know you have two years to claim it. But two years after what, the first parents death or the second?

Do you claim it when one parent dies or after both parents have died?

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