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From April 2017, landlords will no longer be able to deduct all of their finance costs from their property income. They will instead receive a basic rate reduction from their income tax liability for these finance costs.
The restriction will be phased in with 75% of finance costs being allowed in 2017/18, 50% in 2018/19, 25% in 2019/20 and be fully in place for 2020/21. The remaining finance costs for each year will be given as a basic rate tax reduction but can’t create a tax refund.
Please note that finance costs do not just include mortgage interest. Interest on loans to buy furnishings and fees incurred when taking out or repaying loans or mortgages are also included.
As the restrictions are being phased in, there is still time to plan to rebalance a property portfolio and the amount of debt financing. Please talk to us if you would like assistance in this matter.
Currently the AIA gives a 100% write off on most types of plant and machinery costs, but not cars, of up to £200,000 per annum from 1 January 2016.
Significant changes have been made to the rates of capital gains tax (CGT) in 2016/17:
Fundamental changes to the tax system to take account of this tax year.
This publication is published for the information of clients. It provides only an overview of the regulations in force at the date of publication and no action should be taken without consulting the detailed legislation or seeking professional advice.
If the payment of bonuses to directors or dividends to shareholders is under consideration, give careful thought as to whether payment should be made before or after the end of the tax year.
Charitable donations made under the Gift Aid scheme allow a charity to claim back 20% basic rate tax on any donations and if the donor is a higher rate taxpayer they can claim back the tax difference between the higher rate and the basic rate on the donation.
There are a wide range of investments available and we consider some of the main ones with special tax rules.
From April 2017, landlords will no longer be able to deduct all of their finance costs from their property income.
For a family business it is generally worthwhile paying wages to a spouse of between the employee lower earnings limit (£112) and the employee threshold (£155) per week.
There are many opportunities for pension planning but the rules are complicated and there have been significant changes recently so do check the position before making any decisions.
Throughout this publication the term spouse includes a registered civil partner.
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On 21 December 2021, Chancellor of the Exchequer, Rishi Sunak, unveiled a £1 billion COVID-19 fund, including cash grants of up to £6,000 per premises for each eligible firm.
HMRC has reminded self assessment taxpayers to declare any COVID-19 grant payments on their 2020/21 tax return.
HMRC is waiving late filing and late payment penalties for self assessment taxpayers for one month.