Year end tax planning

With less than a month to the end of the tax year there is still time to save tax for 2015/16. We have set out some points you may want to consider.

•    Review dividend payment timing - with new dividend tax rates and a £5,000 dividend allowance from 6 April 2016, the timing of dividends could make a difference to the tax charge.

•    Consider company car options - going forward for each tax year the taxable percentage increases 2% for each CO₂ emission band and the diesel 3% supplement which was expected to be abolished from April 2016 is now to be retained.

•    Review personal pension contributions to ensure annual allowances are being used effectively as from 6 April 2016 the annual allowance may be tapered for those with incomes over £150,000.

•    Defer capital gains by reinvesting in Enterprise Investment Scheme shares.

For more information please do not hesitate to contact the team at Ward Williams Financial Services Ltd on 01932 830664 or by email on wwfs@wardwilliams.co.uk.

 http://www.wardwilliamsfs.co.uk/news-and-events/detail.php?article_id=160

Pensioners 'to gain' from new single tier state pension but younger people 'worse off'

A new single tier state pension is to be introduced for those reaching state pension age from 6 April 2016 onwards. According to research by the Department for Work and Pensions (DWP) many pensioners will receive a boost from the new single tier pension following its introduction from 6 April 2016.

Under the 'flat-rate' system, new pensioners could receive up to £155.65 per week, compared to the current state pension entitlement of £119.30.

The press release states:

‘The data shows the long-term impact of the new State Pension on people’s pensions, with 75% of people set to gain in the first 15 years.

The move to the new system will provide a boost to the State Pension for many women, with over 3 million women receiving an average of £11 more per week by 2030 as a result of the changes, – helping to address the gender inequalities that have persisted under the old scheme.’

To find out what your pension entitlement is visit www.gov.uk/state-pension-statement

Internet link: GOV.UK news

For more information please do not hesitate to contact the team at Ward Williams Financial Services Ltd on 01932 830664 or by email on wwfs@wardwilliams.co.uk.

Extra 3% SDLT on the horizon for buy to lets and second homes

The Chancellor announced in the Autumn Statement last November that he would be introducing new rates of Stamp Duty Land Tax (SDLT) on purchases of buy to let properties or second homes.  An additional 3% SDLT charge will apply to the purchase of residential properties caught by the new rules and this change is expected to come into effect for completions on or after 1 April 2016. There is an exemption from the charges for transactions under £40,000.

In December the Scottish government announced a Land and Buildings Transaction Tax (LBTT) supplement on additional homes. A bill has been introduced in the Scottish Parliament to introduce similar changes to LBTT.

The government is currently consulting on how the rules will be implemented and in which circumstances they will apply. It should be noted that the proposed changes will significantly increase the SDLT and LBTT on the purchase of second homes.

The rules will also impact on those individuals who purchase a new home where they have yet to sell their current home. The higher SDLT and LBTT rates would be payable on the purchase of the second property although this additional tax may be refunded if the first property is sold within 18 months.

To read the consultation which includes some examples of how the rules will operate use the link below.

Please also do get in touch if you would like specific advice on how these rules will affect you and whether or not you should buy or sell before or after April 2016.

Internet links: Consultation Scottish Parliament

For more information please do not hesitate to contact the team at Ward Williams Financial Services Ltd on 01932 830664 or by email on wwfs@wardwilliams.co.uk.