Contents
Don't leave it to chance
Family tax planning
Tax payback - tax credits
Pay rise for the other half?
Jam today, or jam tomorrow?
Pension payments and tax relief
Employee pensions
Children's pensions?
Borrowings and tax
Investment limits
Employee cars and fuel
Give generously and save tax
Capital gains
Capital losses
Second homes
Company or trade?
Inheritance tax
Children's savings?
Business tax
Two jobs = too much NIC?
Should VAT be flat?
Mutiny and bounty
One careful owner
A matter of trust
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There are very generous tax reliefs for gifts of cash and gifts of quoted shares or land to charity. If you are thinking of making any gifts, it is worth thinking about doing so by 5 April in order to enjoy the tax relief in an earlier year. The relief on cash gifts works by reducing the donor's higher rate tax, and allowing the charity to reclaim the donor's basic rate tax already paid. If a 40% taxpayer gives £780 to charity, the charity claims back £220 (giving it £1,000 in total), and the donor claims back £180 (so the gift costs £600 net of the tax relief). The relief on quoted shares or land has two aspects. Any capital gain disappears and is not charged; and the whole value of the shares or land can be taken off the donor's taxable income for the year. If you have a portfolio of shares with some capital gains in, the shares with the biggest gain would be the most tax-efficient thing to give to charity. For example, a gift of shares worth £10,000 would produce an income tax refund for a 40% taxpayer of up to £4,000. If the shares had a gain of £6,000 in them, the CGT saving would be up to £2,400, so the charity would receive £10,000 for a cost of only about £3,600. The last few years have seen the introduction of "carry back gifts" (made in 2005/06 but given tax relief in 2004/05) and "giving a tax refund to charity" (directing the Revenue to pay any refund on your tax return directly to a charity). It's not yet clear whether these are really beneficial to taxpayers, or are just gimmicks.
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© Bayar Hughes & Co., 2010.