Personal Taxation

Are you still on track for retirement?

At Kirk Hills, we can help people in the Exeter area to plan for a comfortable retirement…

Most of us can remember the day we left school or university to begin our working life. However, today you may be closer to retirement than to the day you began your first job.

Throughout the 1980s and 90s people became accustomed to thinking of building savings through pension plans and individual pension policies as the key to providing an income in retirement. During those years commentators could be heard warning that people were not investing adequately for retirement. So what is the state of retirement planning today? In recent years, what some have termed the ‘pensions crisis’ has resulted in something of a conundrum, with many people either not knowing the extent of their retirement income shortfall or not knowing how to address the problem.

Your pension plan may not seem to merit your urgent attention. However, with warnings that people are still saving far too little towards retirement, the challenge is evident. Action is necessary if the state pension is not to be the major (and wholly inadequate) source of income.

Changes affecting landlords of residential properties

Kirk Hills can assist landlords of residential properties in the Exeter area to understand the changes to the taxation of property.

Dividend nil-rate

Kirk Hills can help taxpayers in the Exeter area with queries you have regarding dividends – here is an overview of the new Dividend Allowance scheme…

A person does not have to pay tax on the first £2,000 of dividend income, regardless of the level of non-dividend income. Tax is charged on dividends received over £2,000 at the following rates:

  • 7.5% on dividend income within the basic rate band
  • 32.5% on dividend income within the higher rate band
  • 38.1% on dividend income within the additional rate band

The Dividend Allowance does not reduce total income for tax purposes, and dividends within the allowance still count towards the appropriate basic or higher rate bands. They may, therefore, affect the rate of tax payable on dividends received in excess of the £2,000 allowance.

Furnished holiday lettings

Property ownership has a number of different tax implications, not to mention the complex rules regarding Furnished Holiday Lettings. Kirk Hills can guide individuals in the Exeter area through the legislation, whilst helping to minimise their potential tax liability.

Different tax rules apply to income from letting property, which is generally taxed under the property income rules. For many years, the Furnished Holiday Lettings (FHL) rules allowed holiday lettings of UK properties that met certain conditions to be treated as a trade for some specific tax purposes.

Inheritance tax planning

At Kirk Hills we can help people in the Exeter area with all aspects of inheritance tax planning.

Planning to minimize the liability to inheritance tax (IHT) is a team effort involving you and your professional adviser. To enable long-term objectives to be set, it is necessary to make decisions about your finances and your family.

Lasting Powers of Attorney

Kirk Hills can assist individuals throughout the Exeter area, and we can provide expert advice on a wide range of personal taxation issues. Here is information on lasting powers of attorney.

A Lasting Power of Attorney (LPA) is a legal document which someone (the Donor) makes, giving someone they trust (the Attorney) the power to make decisions on behalf of the Donor at some time in the future if he/she lacks the mental capacity or no longer wish to make those decisions him/herself. The Donor must be aged 18 or over with the capacity to make an LPA. Any named individual with mental capacity aged 18 or over can be an Attorney as long as the relevant details are correctly written on the LPA Form.

Personal tax - self assessment

We summarise the self-assessment rules and penalties for failing to comply with your obligations. If you live in the Exeter area we, at Kirk Hills, can prepare your tax return on your behalf and advise you on payments that may need to be made to HMRC.

Under the self assessment regime an individual is responsible for ensuring that their tax liability is calculated and any tax owing is paid on time.

Planning for a year's prosperity

As a professional firm of accountants, Kirk Hills can advise people in the Exeter area on a wide range of tax and financial planning issues, so that you make the most of your wealth.

Separation and divorce

Kirk Hills can advise on the tax implications of separation and divorce, and offer practical guidance to individuals in Exeter and beyond. It is an unfortunate fact of modern life that many marriages do not survive. When separation, divorce, or dissolution occurs, there will almost inevitably be some tax consequences.

Statutory Residence Test

We consider the statutory residence test and outline rules and records required. If you live in the Exeter area we, at Kirk Hills, can provide advice on your individual circumstances.

The concept of residence in the United Kingdom is fundamental to the determination of UK tax liability for any individual.

The Statutory Residence Test (SRT) provides, through a series of tests, a definitive process to determine the UK residence status of any individual. That status applies for income tax, capital gains tax and inheritance tax purposes.

Once that status has been established then other rules determine the extent of an individual’s liability to UK taxes. These other rules may include not just UK statute but also double tax treaties with other countries. These rules are not covered in this factsheet.

Capital gains tax and the family home

A valuable relief exists on the sale of the family home but in certain situations careful planning is required to ensure that the relief is obtained. If you live in the Exeter area we, at Kirk Hills, can provide taxation advice to ensure that maximum opportunity is taken of principal private residence relief.

The capital gains tax (CGT) exemption for gains made on the sale of your home is one of the most valuable reliefs from which many people benefit during their lifetime. The relief is well known: CGT exemption whatever the level of the capital gain on the sale of any property that has been your main residence. In this factsheet we look at the operation of the relief and consider factors that may cause it to be restricted.

Child Benefit Charge

The receipt of Child Benefit can result in a tax bill. This potential bill brings the Child Benefit into the scope of self-assessment and, if you live in the Exeter area we, at Kirk Hills, can advise you on the potential application of the Child Benefit Charge and possible tax planning that may be appropriate to remove the Child Benefit Charge.

The High-Income Child Benefit charge applies to a taxpayer who has income over £50,000 in a tax year where either they or their partner if they have one, are in receipt of Child Benefit for the year.

Does your estate planning pass the test?

At Kirk Hills we can help people in the Exeter area with inheritance tax planning and estate planning. Here are some useful pointers…

It is never too early to plan your estate. If it is large, it could be exposed to inheritance tax at 40%, and if it is small, advance planning can help you ensure that your assets will go to your chosen beneficiaries.

Giving to charity

As experienced accountants, Kirk Hills can advise on a range of issues when it comes to giving to charity. We can help individuals and businesses in Exeter to make use of the available tax reliefs and to maximize the value of their donations.

Land and Building Transaction Tax

Land and Building Transaction Tax (LBTT) is payable by the purchaser in a land transaction which occurs in Scotland. At Kirk Hills, we can provide guidance on LBTT in the Exeter area.

From 1 April 2018, a new Land Transaction Tax (LTT) replaces Stamp Duty Land Tax (SDLT) in Wales. LTT is broadly consistent with SDLT but also introduces some key changes.

Making a will and other related matters

Making a Will is one of the most fundamental aspects of estate planning, yet many people do not appreciate its importance. At Kirk Hills we have experience in many aspects of estate planning, and can advise people in the Exeter area on strategies to help minimise the tax bill.

It is an essential means of ensuring that your assets are distributed in accordance with your wishes. You will thus be assured that you have made proper provision for all those you feel should benefit. And you choose the executors and trustees who will carry out your wishes.

It is also an opportunity to plan the distribution in a tax-efficient manner, particularly with regard to inheritance tax (IHT). A Will can also appoint guardians of infant children, besides making appropriate financial provision for them.

Personal tax - when is income tax and capital gains tax payable?

Under self assessment an individual is responsible for ensuring that their tax liability is calculated and any tax owing is paid on time. We summarise the tax payment rules and penalties for failing to pay on time. If you live in the Exeter area we, at Kirk Hills, can prepare your tax return on your behalf and advise you on payments that may need to be made to HMRC.

Repayment of student loans

Kirk Hills can help businesses in the Exeter area with payroll-related issues, including PAYE and the repayment of student loans.

Student loans are part of the Government’s financial support package for students in higher education in the UK. They are available to help students meet their expenses while they are studying.

The Student Loans Company (SLC) was set up to undertake the administration and processing involved in the payment of loans and grants to students, and the payment of tuition fees to higher and further education services.

The majority of students will have a loan to cover the full cost of tuition fees plus a maintenance loan to cover the cost of living expenses. Everyone on an eligible course qualifies for 72% of the maximum loan, regardless of income, and the rest is income-assessed. These loans are subject to interest at the rate of inflation, on the basis that the amount eventually repaid will have the same “real value” as the amount borrowed.

Stamp Duty Land Tax

Stamp Duty Land Tax is payable by the purchaser in a land transaction which includes a simple conveyance of land such as buying a house but also creating a lease or assigning a lease. If you are considering property investment or acquiring a lease on a commercial property in the Exeter area we, at Kirk Hills, can help you to make property acquisitions in a tax efficient manner.

Supporting your children

If you are based in the Exeter area and would like advice on maximizing your personal wealth and supporting your children, Kirk Hills would be happy to assist you.

If you are a parent, there are various ways in which you can provide financial assistance for your children, but it is always as well to be aware of the tax consequences of the method of help.

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