Everfair Tax : Surrey (Weybridge) Office

Suite 6, The Monument Building, 45-47 Monument Hill, Weybridge, Surrey, KT13 8RN  
Tel:  01932 320 800
 

Email: info@everfairtax.co.uk

All rights reserved | Privacy Policy | Use of Cookies

  • Facebook Social Icon
  • Twitter Social Icon

Website by www.CobsWebs .com 

Which Life Events May Affect Your Taxes?

May 15, 2018

As you go through life your circumstances will change and often these will have an impact on either your tax obligations, or the reliefs you are entitled to.  It is therefore important to review your taxable status on a regular basis and in particular if any of the changes shown here relate to your own personal circumstances. 

 

 

Getting Married

Whilst you are unlikely to marry someone solely to save taxes, getting married can often result in a welcoming tax break!  The Marriage Allowance allows you to transfer £1,190 of your Personal Allowance to your husband, wife or civil partner if they earn more than you but pay tax at the basic rate.  To benefit, the lower earner must have an income of £11,850 or less and the allowance may then reduce their spouse’s tax by up to £238 per year.

 

 

Children

Having a baby or claiming dependents can impact and reduce your tax obligations.  In addition to receiving the Child Tax Credit, you are able to gift money to your child tax free.   However, should the money you gift make more than £100 in interest per year before tax - or £200 if both parents give money - you will be taxed on all of the income and not just the income over £100, as if it were your own.

 

The £100 limit only applies to cash gifts from parents, step-parents, or guardians and not other family members, such as grandparents, or friends.

 

 

Selling your home

If you sell a property that is not your main residence and you have made a profit from when it was purchased, you may be subject to Capital Gains Tax.  This tax applies to all buy-to-let properties, business premises, land sales, and any inherited property.

 

However, if you have lived in the property for the full time you have owned it, you are entitled to Private Residence Relief and no capital gains tax is due.  You will also not be liable to pay capital gains tax should you gift the property to your husband, wife, civil partner or a charity. 

 

 

Promotion at work

Promotions at work and the remuneration that goes with them is always well received.  But, be aware that the additional income may tip you into a higher tax bracket and personal allowances and benefits such as child tax credit may also be affected, reduced or cancelled.

 

 

Retirement and pensions

Pensions offer unrivalled tax breaks and are an excellent tax efficient way to provide for your retirement.  Contributions to pension funds receive tax relief at your highest marginal rate and as an added benefit they are also allowed to grow tax-free.

 

The maximum amount that may be contributed in a year from all sources is £40,000 and to receive tax relief, your personal contributions cannot be higher than your earnings.   In addition, if you are not earning enough to pay income tax, you are still entitled to receive tax relief on pension contributions up to a maximum of £2,880 a year.

 

When you start to receive your pensions it is important to check the tax that is being deducted, as the transition to the new payer can cause incorrect PAYE codes to be used, especially if you decide to carry on working after you take your pension.

 

Inheritance

Inheritance Tax is paid on the property, money and possessions of someone who’s died and the standard tax rate is 40%.  Tax is only paid on the sum that is above the tax free threshold, which is £325,000 and if your estate value is below this, there is no tax to pay.  You may avoid paying inheritance tax if you leave your estate to your spouse or civil partner, a charity or a community amateur sports club.

 

If your estate is worth less than the threshold and you are married or in a civil partnership, you are able to add your residual allowance to your partners when you die, which can then increase their threshold to as much as 1,000,000.

 

 

Tags:

Share on Facebook
Share on Twitter
Please reload

Featured Posts

We're recruiting - please get in touch

August 20, 2019

1/9
Please reload

Recent Posts

October 14, 2019

Please reload

Archive