The disposal of property is a chargeable event for capital gains purposes, therefore a liability to capital gains tax ("CGT") can arise. This is the case even if you swap your property for another property and no money changes hands. However, there is often overlooked CGT relief which applies where there is an exchange of interests in land which are jointly owned by two or more persons. For example, if a husband and wife are getting divorced and they are joint owners of two rental properties, roll-over relief may be available if the wife transfers her half of the first property to her husband in exchange for his half of the second property. The relief operates by treating the disposal as a no gain/no loss transaction, with the donee i...

In the upcoming years, taxpayers will not be issued with automatic penalties for the late filing of tax returns or the payment of tax. Instead, HMRC will issue "points" for missed deadlines, before a financial penalty is levied. It is intended that this new system will be fairer and only penalise those who persistently fail to meet their compliance obligations. The changes will apply to VAT customers for accounting periods beginning on or after 1 April 2022, and to those who submit self-assessment tax returns with business or property income exceeding £10,000 p/a for accounting periods beginning on or after 6 April 2023, and to all other self-assessment taxpayers from 6 April 2024. Current Rules (Self-Assessment) Under the current...

If you sell a property which is your only or main residence or has been at some point during your period of ownership, Private Residence Relief (“PRR”) will be available to exempt either all or part of the capital gains that arise on the sale of the property. Please see my previous articles for more details of this relief in general,  and how it can be calculated and claimed. In particular, there are specific rules that married couples and couples who are getting divorced should be aware of and this article will focus on these specific areas. Call us us on 0113 887 8432 now to chat through your circumstances. PRR and Married Couples PRR Election Where a married couple are living together, they can only have one qualifyin...

The housing market is currently booming with the average UK house price increasing by 10.2% for the year to March 2021. One catalyst behind this surge is thought to be the stamp duty holiday due to end on 30 June 2021. However, according to property market analysts, this surge may be short lived as house prices are expected to fall again post June after the stamp duty extension deadline, where the extension to the rate bands are expected to be in place until 1 October 2021. Please check our article on the Spring 2021 Budget for further information regarding this. Amongst those acquiring new properties will be landlords purchasing buy-to-lets. With this in mind, we’ve set out 3 top tips below to help landlords efficiently manage thei...

In the 21st century, cryptocurrencies have gained huge traction globally, particularly with the creation of Bitcoin in 2009. Evidence of this significant increase in demand is that there are now more than 4,000 cryptocurrencies to choose from. However, despite this increasing popularity, a significant proportion of the population is still unsure as to what cryptocurrencies actually are, and whether they are worth investing in from a tax perspective. Trading in cryptocurrencies certainly has its success stories with there now being an estimated 100,000 people with $1 million or more invested in bitcoin. However, you should take care when considering these investments as there is a large amount of volatility involved when dealing with t...

What is Domicile? Domicile is a concept of common law in the UK and each individual has only one domicile. Many people are unsure as to what this nebulous concept means; it is not the same as nationality, residence, or citizenship. Your domicile status is best defined as the country where your ‘homeland’ is, whereby the country in which you have a permanent home and where you plan to live indefinitely are two of the predominant contributing factors in determining this. Why is Domicile Important? Many people are internationally mobile; therefore, domicile helps to establish which UK tax rules are applicable to these individuals. The legal system where you are considered to be domiciled works alongside your residence status to ...

In the latest of a series of concessions made in light of COVID-19, HMRC has announced that taxpayers will not be issued with a late-filing penalty if they fail to submit their 2019/20 tax return by the 31 January deadline - provided that it is submitted by 28 February 2021. Whilst taxpayers who can submit their tax return by 31 January are encouraged to do so, the £100 automatic late filing penalty will not apply if the return is filed by the new deadline. It is important to note that taxpayers are still required to pay their tax bill by 31 January 2021, therefore interest will be charged from 1 February on any outstanding liabilities. Taxpayers who are unable to pay their tax bill on time can apply to spread the bill over a numb...

Only/Main Residences If you sell a property which is your only residence and has been your only home throughout your period of ownership, you will not be required to pay Capital Gains Tax ("CGT") if a capital gain arises on the disposal. This is because Private Residence Relief ("PRR') is available for the full period of ownership, reducing any chargeable capital gains to nil. This also applies if you own several residences and have elected for one to be your main residence for PRR purposes (please see our previous article Principle Private Residence "PRR" Elections: Your Options for further details of this). Call us us on 0113 887 8432 now to find out if you are eligible for PRR.  Additional Residences Furthermore, if yo...

What is The Statutory Residence Test? The Statutory Residence Test (SRT) was introduced from 6 April 2013, to allow individuals (such as UK expats) to determine their UK tax residence status. Where an individual is a UK tax resident, they are subject to UK tax on their worldwide income and gains. Where they are non-UK tax resident, then broadly, they will only be subject to UK income tax on their UK source income, such as income from UK property, interest from UK bank accounts, dividends from UK companies etc. Specific rules apply for capital gains tax, and in particular on disposals of UK land/property. The Statutory Residence Test – Necessary Steps The SRT is made up of 3 sets of tests, which are considered in order. The...

What is Principle Private Residence “PPR” Relief? If you sell a property which is your only or main residence or has been at some point during your period of ownership, Principle Private Residence (“PPR”) Relief will be available. This means that if a capital gain arises on the sale, PPR will exempt either all or part of the gain from Capital Gains Tax (“CGT”). Call us us on 0113 887 8432 now to discuss your circumstances.  PPR elections for individuals with more than one residence   If you have more than one private residence, you can make an election to nominate one of your residences as your PPR. This election must be made within two years of the date that you have a new combination of residences; for example, ...