Taxation

The details below are a summary of the main tax rates from April 2008.
This is a guide only and should not be relied upon when calculating definitive figures for tax.
Further information is available from HM Revenue and Customs - www.hmrc.gov.uk/, and it is suggested that a qualified accountant is consulted for detailed advice.
 

Rates and Allowances  

Income Tax

(1) - These allowances reduce where the income is above the income limit by £1 for every £2 of income above the limit. They will never be less than the basic Personal allowance or minimum amount of Married Couple’s allowance.

(2) - Tax relief for the Married Couple's allowance is given at the rate of 10 per cent.

Taxable Bands

* Takes into account changes to 10% band

Rates and Allowances - Inheritance tax(IHT)

Any excess value above the nil-rate band is liable to inheritance tax at 40%. For further information about nil rate bands see HMRC Inheritance Tax: Customer Guide.

Lifetime Gifts
Those made to an individual are initially not chargeable to tax
To trusts established after 22/3/06 are chargeable at 1/2 death rates.
Gift made within 7 years of death
Tax at death rates are payable less a reduction as below and credit is given for any tax paid on lifetime gift
Years since gift        0-3    3-4       4-5     5-6      6-7
Reduction                0%    20%    40%    60%    80%

Trust established after 22/3/06, accumulation and maintenance trusts from 6/4/08 and all discretionary trusts subject to a 10 year charge of 6% on assets in excess of nil rate bands and pro rata on exit.
Certain trusts established on death are not liable to these charges.

Main exemptions
Spouse/civil partner - both UK domiciled (or transferor non domiciled)                unlimited
Non domiciled spouse/civil partner - UK domiciled transferor                                 £55,000
Annual gifts per donor                                                                                            £3,000
Small gifts per donor not exceeding                                                                         £250
Marriage/civil partnerships gift by -parent                                                                £5,000
                                                    other relative                                                      £2,500
                                                    other                                                                  £1,000

Regular gifts out of surplus income                                                                          unlimited
Charities and political parties                                                                                   unlimited
Trusts for the vulnerable                                                                                          unlimited

Business and agricultural relief
INterest held for more than 2 years in a business, farm or shares in qualifying
unlisted companies and let farmland held for 7 years                                                 100%
Assets used by qualifying company or business, or controlling holding in listed co      £50%
 

Capital Gains Tax(CGT)

2008-09
Annual exempt amount for individuals,
trustees of settlements for vulnerable persons
personal representatives of the estate of a deceased person.                  £9,600

Other trustees                                                                                       £4,800

Rates
Individuals        18%

Other trusts & personal representatives    18%

Exemptions
These include:
Main home, cars and chattels worth less than £6,000
Chattels worth over £6,000 charged on 5/3 excess over £6,000

Indexation allowance

Individuals and others within the charge to capital gains tax are not entitled to indexation allowance for any period after April 1998.
Taper relief is no longer available

Rates and Allowances - Corporation Tax

Stamp Taxes rates

The rate of stamp duty / stamp duty reserve tax on the transfer of shares and securities is unchanged at 0.5 per cent for 2007-08.

Stamp Duty Land Tax rates from 23/03/06

Please note that the applicable rate of Stamp Duty Land Tax must be applied to the whole of the consideration paid to acquire the land / buildings.

Land transactions with an effective date on or after 23 March 2006

N.B. Disadvantaged Area Relief for non-residential land transactions is not available for non-residential land transactions with an effective date on or after 17 March 2005.

However the relief is preserved for:

• the completion of contracts entered into and substantially performed on or before 16 March 2005
• the completion or substantial performance of other contracts entered into on or before 16 March 2005, provided that there is no variation or assignment of the contract or sub-sale of the property after 16 March 2005 and that the transaction is not in consequence of the exercise after 16 March 2005 of an option or right of pre-emption
  
  From 1 Oct 2007 to 30 Sept 2012 no charge on Zero Rated Carbon Emission Homes up to £500,000. Above £500,000 reduction of £15,000

New leases (lease duty)

Please note that when calculating duty payable on the 'NPV' (Net Present Value) of leases, you must reduce your 'NPV' calculation by the following before applying the 1 per cent rate.

Residential - £125,000

Non-residential - £150,000

Duty on premium is the same as for transfers of land (except special rules apply for premium on non-residential properties where rent exceeds £1,000 annually).