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Landlords’ Tax Welcome Pack

It is a new personal tax service specially designed for landlords. It combines preparation of the annual Self Assessment Tax Return with 5 additional features to help landlords manage their properties and minimise their tax cost at every turn.
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Welcome to the 100% + club (whether you like it or not)

The 100% + club is an exclusive group of individuals who manage to achieve a tax saving greater than their expenditure or conversely, suffer a tax charge greater than the income they receive!
Child Benefit in 2013 – your very own financial nightmare?

Child Benefit in 2013 – your very own financial nightmare?

Over 1 million families will be caught by the Government’s new rules for retrospective means-testing of Child Benefit payments which come into effect on 7 January 2013.

Tax Planning for Individuals

Landlords’ Tax Welcome Pack

Frequently Asked Questions

Q1: What is the Landlords’ Tax Welcome Pack?

Ans: It is a new personal tax service specially designed for landlords. It combines preparation of the annual Self Assessment Tax Return with 5 additional features to help landlords manage their properties and minimise their tax cost at every turn.

Q2: How much does it cost?

Ans: The 5 additional features are provided free of charge to all personal tax clients owning rental property.

The price we charge for dealing with your Self Assessment Tax Return depends on several factors including the number and type of rental properties you have, the nature of your other income and gains, and the quality of information you provide to us.

To get a quote for dealing with your Self Assessment Tax Return just follow this link to send us an email or request a call back.

Q3: What are these additional features and their benefits?

Ans: If you become a client of John Gale & Co you will receive the following benefits in addition to a full Self Assessment Tax Return service:-

Overview of the taxation of rental income for landlords.

Gives you a basic understanding of the main types ofrental property and their different tax treatments.

Includes information on Unfurnished Lettings, Furnished Lettings, Furnished Holiday Lettings, Rent-a-room relief, Commercial Lettings, Residential Lettings, Capital Allowances, Loss Relief, Capital Gains Tax, Inheritance Tax, Stamp Duty, Overseas Property, company ownership – and much more.

Helps you understand and identify the tax issues – both now and in the future – that need to be addressed when running a property business.

Basic guide to tax-deductible expenditure for landlords.

Enables you to identify which of the main costs associated with owning and running a rental property are deductible for tax purposes.

Helps you minimise your tax bill.

Basic guide to recording income and expenditure.

Enables you to set up a simple methodology for recording all your rental income and expenses for the year by using a single spreadsheet document.

Helps you manage your property-related finances and also helps collect relevant information in a form suitable for processing into your Tax Return.

Quarterly tax update for landlords

Keeps you up to date with changes in the taxation of rental property.

Provides information on current and proposed changes to legislation; changes in HMRC guidance and practice; relevant Court and Tax Tribunal case decisions; Budget update.

Principally covers the direct taxes – Income Tax, Capital Gains Tax and Inheritance Tax.

Helps you respond to changes in tax law and practice and helps you plan ahead to minimise your tax costs.

Year-end tax planner

Checklist of action points for improving your tax position before the end of the tax year on 5 April.

Helps you take any necessary action before the end of the tax year to utilise available exemptions or reliefs and to minimise your tax costs.

 

Q4: Are there any other services you provide that could help me improve my tax position?

Ans: At John Gale & Co we work with you to help you understand your tax position, identify and quantify current and future tax costs, and ultimately reduce these costs by careful and appropriate planning.

Here are some of the other services we provide in the arena of property taxation:

CGT Review

Gives you an estimate of your exposure to Capital Gains Tax and considers ways to improve your position.

Incorporates special CGT rules for main residence lettings relief, taxation of leases, and review of Entrepreneurs’ Relief for Furnished Holiday Lettings.

Particularly useful when planning in advance of a possible property sale or gift, or as part of an Estate Planning exercise.

If you have already sold your property we can calculate your CGT liability and incorporate it within your Self Assessment Tax Return.

IHT Review

Gives you an estimate of your exposure to Inheritance Tax and considers ways to improve your position.

Incorporates review of eligibility for special IHT reliefs for Agricultural Property and Business Property including, possibly,Furnished Holiday Lettings.

A key part of IHT/Estate planning. Helps you understand your IHT position and how to improve it.

Capital Allowances Review

Gives you a full analysis of all qualifying expenditure to assist in maximizing the allowances you can claim (where eligible).

Losses Review

Identifies and quantifies any income or capital losses and reviews the options for obtaining relief to minimise current and future tax liabilities.

Ensures maximum tax relief for losses, at the earliest opportunity.

Pre-acquisition tax advice

Review of proposed contract and elections etc where Capital Allowances are available.

Review of ownership structure to maximise income or capital tax reliefs/allowances or to fit other Estate Planning eg use of Trusts, purchase via Pension Scheme etc.

Helps you plan ahead in advance of a property purchase.

Advice on tax implications of Non-Residence including going abroad to work

Review of your tax position under pre-FB2013 rule changes and/or post-2013 rule changes, as appropriate.

Dealing with the Non-Resident Landlords Scheme.

Helps you understand your tax position and identifies opportunities for improving it.

Advice in connection with foreign properties

Review of the interaction of foreign taxes with UK tax to minimise the cost of double taxation (being taxes in both UK and overseas).

Review of ownership structure to maximise income or capital tax reliefs/allowances or to fit other Estate Planning eg use of Trusts.

 

Q5: How do I find out more?

Ans: You can call John Gale direct on 07882 585 176 or go to our Contact pages to send us an email or to request a call back.

Welcome to the 100% + club (whether you like it or not)

The 100% + club is an exclusive group of individuals who manage to achieve a tax saving greater than their expenditure or conversely, suffer a tax charge greater than the income they receive!

I’m not talking aggressive tax planning, rather ‘imbalances’ in the tax system.

From a taxpayer’s perspective, here are some examples of the good and the bad.

Example 1: The High Income Child Benefit Charge

Mr X has 4 children from his first marriage and Mrs X has 4 from hers. In addition to bringing up 8 children, Mrs X works part-time earning £10,000 per annum. Mr X works full-time in salaried employment earning £50,000 per annum. In April 2013 he is rewarded for his hard work with a £10,000 pay rise. You would be forgiven for thinking this would be a real boost for the family’s stretched finances. Unfortunately, when the clawback of Child Benefit is added to the tax and national insurance payable on the additional £10,000, the family will actually be worse off in 2013/14 than if he declined the pay rise. Mr X’s marginal rate of tax (including the High Income Child Benefit Charge) is actually 101.3%.

In fact anyone in the £50K to £60K income bracket (including the self-employed and people with investment income) who is caught by the High Income Child Benefit Charge will have a terrible marginal rate of tax in 2013/14 – and the more children you have the worse it will be! On the flip side, a high marginal rate of tax means that any tax breaks that work by reducing the amount of your taxable income will be supremely valuable as the effective rate of tax relief will be huge!

If you want some expert tax advice to help make a real difference to your family’s finances then give me a call – as soon as possible.

Example 2: EIS/Seed EIS

Mr Y pays tax at 50% on his top slice of income. He invests the maximum £100,000 in a Seed EIS investment before 5 April 2013. His investment represents the reinvestment of a capital gain on which he would otherwise pay Capital Gains Tax (CGT) at 28%. Unfortunately the EIS investment fails completely after 3 years. Fortunately, the combination of 50% income tax relief on the Seed EIS investment in 2012/13, 28% relief on the exemption from CGT on the reinvested gain and finally income tax relief available when the investment fails (lets assume his marginal tax rate is then 45%) means that he could end up reducing his tax bill by a cumulative £100,500 – slightly more than the investment actually cost him!

How does the tax system work for you? Do you know your marginal rate of tax? Do you know how to maximise your tax reliefs? If not, give me a call – as soon as possible.

Child Benefit in 2013 – your very own financial nightmare?

family01Over 1 million families will be caught by the Government’s new rules for retrospective means-testing of Child Benefit payments which come into effect on 7 January 2013.

The retrospective nature of the High Income Child Benefit Charge (HICBC) means that most of these families will have to repay some or all of the Child Benefit payments they have received. This throws up the very real prospect of having to repay money that you have already spent!

  • If you or your partner earn over £50,000 but less than £60,000 a year (including income from all sources including dividends, interest and rents) then you should expect to have to repay some of your Child Benefit payments – more you earn, the more you repay.
  • If you earn over £60,000 then expect to repay it all. For a family with 3 children this could mean an annual tax bill of almost £2,500.
  • If your income is taxed under PAYE then HMRC may allow you to pay over 12 months by deduction from your future salary. Otherwise consider putting money aside if you would otherwise be unable to pay it back.
  • You will also need to register with HMRC and complete a Self Assessment Tax Return giving full details of your income and including a calculation of your HICBC.
  • Consider whether to ‘opt-out’ in advance and not receive any further Child Benefit payments. However you should take professional advice before doing this because, although you can potentially change your mind and ‘opt back in’ if your circumstances change (eg you lose your job), there are situations where you could be worse off.
  • Consider ways to reduce your HICBC such as increasing pension contributions or Gift Aid payments, offsetting trading losses, or sacrificing salary for childcare vouchers.

This article was written by John Gale, an independent Chartered Tax Adviser with over 20 years’ experience advising people in relation to their tax affairs. For further information, or to find out about a free webinar, please contact John on john@johngaletax.com.