Reviewing your assets, including your property portfolio, is advisable in the current economic climate. Volatile markets with historically low investment returns are highlighting the importance of managing risk and minimising costs.
In this environment recent changes to the taxation of high-value residential property could have a potential impact on your planning.
In this video Leonie Kerswill explains how new tax rules may affect your property assets, family business, income tax reliefs and wider investment portfolio.
There have been various recently announced changes in respect of high-value (ie over £2m) UK residential property held by ‘non-natural persons’ (broadly, companies and partnerships with corporate partners).
You may opt to split any sales of assets you make between tax years to maximise use the use of your £10,600 CGT annual allowance.
You could also transfer any assets into your spouse’s name pre-sale to utilise their annual allowance and their lower CGT band of 18% (if they are a basic rate taxpayer )
A cap on income tax reliefs of £50k or 25% of your income is likely to be brought in from April 2013 – the only exceptions are approved limited reliefs (pensions, venture capital trusts or enterprise management incentives etc.) and charitable giving. So it’s more important than ever to make sure you're using your available limited reliefs efficiently.
Determining what the correct investment strategy is for you will depend on your unique circumstances.
Whether you want to manage your investment risk (through market changes or institution failure), model your future cashflow requirements, understand and structure the most tax effective environment for your assets, or obtain assistance with allocating your capital to meet required investment returns; we can assist.
If you qualify, you can only pay CGT at the preferential rate of 10% on the disposal of up to £10m of business assets. There’s also potential for your spouse and other family members to qualify for another £10m disposal if they’re involved with the business.
If you run your own business you should be aware there are a range of business structures possible in the UK with very different legal and tax attributes for the owners. Getting the right structure for you and your business can prove cost-effective over the long term but it can also afford varying levels of legal and financial protection for you and your business assets.