Taxation

Capital Gains Tax

For 2009/2010, individuals are entitled to an annual exemption of £9,600 and trustees to £4,800.

If you think that your investments have made substantial unrealised gains and you have not yet made use of your annual allowance, you should consider taking financial advice as you may be able to utilise your annual allowance, or similar. You could for example, consider reinvestment in an ISA (subject to the ISA limits), reinvestment by a spouse/civil partner or reinvestment into a similar holding. Please contact us on 01483 211800 for more information.

Consideration should be given to transferring assets between spouses/civil partners before encashment to enable each to use an annual allowance.

It is important to consider whether any investments have made a loss and whether excess gains could be offset by any losses. Losses can be carried forward indefinitely, so it is important to include gains, losses and the annual exemption in any calculation to determine how to maximise relief.

Inheritance Tax

Certain lifetime gifts can be made without giving rise to an inheritance tax charge. For 2009/2010 the annual gift exemption is £3,000 and it is worth considering making a gift of this amount if you are in a position to do so.

In addition, if you did not make use of any part of the £3,000 annual gift exemption to which you were entitled for 2008/2009, then this can be utilised before 5th April 2010. Please note that any unused allowance for the earlier tax year must be used before the current year’s allowance. It can only be carried forward for one year and then, if unused, it is lost.

Unlimited gifts can also be made in the form of Potentially Exempt Transfers (PETs). Provided you live for 7 years after making the gift, it will be free of inheritance tax.

Please ensure that, should a gift be made by cheque, sufficient time is given for the cheque to clear before 5th April; otherwise it will not be included in the current year’s total.

Gifts of £250 can be made to any number of separate individuals without giving rise to an inheritance tax charge. Gifts of varying amounts can also be made between family members on the occasion of a wedding/civil partnership ceremony, without any inheritance tax liability.

The information set out on this page is intended to provide a general appreciation of the topic and it is not advice. Guidance should be sought from a specialist who is qualified to advise in your specific circumstances.

For more information on any aspect of Taxation please contact Surrey Financial Advice on 01483 211800 or email us at admin@surreyifa.co.uk  We will be happy to assist you.