Savings & investments
‘This section contains introductory guides to tax efficient saving and investment options.
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We consider the taxation of capital gains and outline the reliefs available. If you live in the Exeter area we, at Kirk Hills, can provide taxation advice to ensure that maximum opportunity is taken of the reliefs available for capital gains tax.
A capital gain arises when certain capital (or ‘chargeable’) assets are sold at a profit. The gain is the sale proceeds (net of selling costs) less the purchase price (including acquisition costs).
The Enterprise Investment Scheme allows qualifying companies access to equity investment from new and, in some cases, existing shareholders. The shareholders obtain potentially attractive tax breaks. At Kirk Hills, we can provide help if you are interested in financing your business in the Exeter area or you are interested in providing capital to businesses.
The purpose of the Enterprise Investment Scheme (EIS) is to help certain types of small higher-risk unquoted trading companies to raise capital. It does so by providing income tax and CGT reliefs for investors in qualifying shares in these companies.
There are really two separate schemes within the EIS:
a scheme giving income tax relief on the investment and a CGT exemption on gains made when the shares are disposed of; and/or
a scheme aimed at providing a CGT deferral.
An individual can take advantage of either or both of these schemes.
Personal Pensions are common types of ‘registered pension schemes’ which allow members to obtain tax relief on contributions into the scheme and tax free growth of the fund within limits. We consider the rules here. At Kirk Hills, we provide advice on all taxes in the Exeter area and can help you to consider maximising tax relief on pension provision.
The Seed Enterprise Investment Scheme complements the Enterprise Investment Scheme and is attractive to start up companies and investors in such companies. At Kirk Hills, we can provide help if you are interested in financing your start up business in the Exeter area or you are interested in providing seed capital to such businesses.
The Seed Enterprise Investment Scheme (SEIS) provides tax relief for individuals prepared to invest in new and growing companies. It is the junior version of the Enterprise Investment Scheme (EIS). Investors can obtain generous income tax and capital gains tax (CGT) breaks for their investment and companies can use the relief to attract additional investment to develop their business.
At Kirk Hills we can advise individuals in the Exeter area on a range of tax-saving opportunities. The following article compares Venture Capital Trusts, the Enterprise Investment Scheme and Seed Enterprise Investment Scheme.
The reliefs for Venture Capital Trusts (VCT), the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) are similar in many respects, but there are some significant differences. The table below highlights the main reliefs. For further details see the facts sheets for each type of investment.
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At Kirk Hills we can advise businesses in the Exeter area on the disposal of chattels, and potential Capital Gains Tax liabilities. Here are some of the issues that you may need to consider…
The term ‘chattel’ refers to an item of tangible movable property. It would therefore include:
- Items of household furniture
- Paintings, antiques, items of crockery and china, plate and silverware
- Lorries and motor-cycles
- Items of plant and machinery not permanently fixed to a building
It does not apply to:
- Property used solely or mainly for business purposes, where capital allowances have been, or could have been, claimed
- Property held solely as an investment.
ISAs are tax-exempt savings accounts available to individuals. At Kirk Hills, we advise individuals on tax efficient investments in the Exeter area. Some information about ISAs is given below.
Successive governments, concerned at the relatively low level of savings in the UK economy have over the years introduced various means by which individuals can save through a tax-free environment.
Buy to let traditionally involves investing in property with the expectation of capital growth with the rental income from tenants covering the mortgage costs and any outgoings. If you live in the Exeter area we, at Kirk Hills, can help you sort out some of the potential problems that may arise and structure the investment appropriately.
In recent years, the stock market has had its ups and downs. Add to this the serious loss of public confidence in pension funds as a means of saving for the future and it is not surprising that investors have looked elsewhere.
The UK property market, whilst cyclical, has proved over the long-term to be a very successful investment. This has resulted in a massive expansion in the buy to let sector.
Buy to let involves investing in property with the expectation of capital growth with the rental income from tenants covering the mortgage costs and any outgoings.
However, the gross return from buy to let properties – ie the rent received less costs such as letting fees, maintenance, service charges and insurance – is no longer as attractive as it once was. Investors need to take a view on the likelihood of capital appreciation exceeding inflation.
Tax-Free Childcare will eventually replace Employer Supported Childcare and has the advantage that the self employed, as well as employed individuals, can make use of the scheme. At Kirk Hills, we can provide guidance on Tax-Free Childcare and Employer Supported Childcare in the Exeter area.
The government has introduced a tax incentive for childcare Tax-Free Childcare (TFC).
Venture Capital Trusts (VCTs) offer similar tax breaks to individuals as the Enterprise Investment Scheme. VCTs are managed by a variety of specialist fund companies. At Kirk Hills, we advise individuals on tax efficient investments in the Exeter area. Some information about VCTs is given below.
Venture Capital Trusts (VCTs) are complementary to the Enterprise Investment Scheme (EIS), in that both are designed to encourage private individuals to invest in smaller high-risk unquoted trading companies affected by the equity gap. While the EIS requires an investment to be made directly into the shares of the company, VCTs operate by indirect investment through a mediated fund. In effect they are very like the investment trusts that are obtainable on the stock exchange, albeit in a high-risk environment.