Author Archives: Mark McLaughlin

Company purchase of own shares: No big ‘deal’!

Individual shareholders selling their shares back to the company normally prefer the proceeds from the share disposal to be treated as a capital receipt, where possible. This is because the capital gains tax (CGT) rate is 10% if business asset disposal relief is available, or 20% in most other cases.  Income or capital gain? However,… Read More »

NICs on rental profits?

Individual owners of buy-to-let rental properties generally assume there are no National Insurance contributions (NICs) to pay on their rental profits (as there is for self-employed individuals carrying on a trade). Class 4 NICs Self-employed individuals are generally liable to Class 4 NICs on net profits chargeable to income tax as trading income (and which… Read More »

Shortcut to business asset disposal relief?

Business asset disposal relief (BADR; previously known as entrepreneurs’ relief (ER)) is a valuable and much sought-after capital gains tax relief. However, the conditions for claiming the relief are often problematic. Jumping hurdles For an individual shareholder disposing of shares in a company, the most common condition for relief is that throughout a two-year period… Read More »

Inheritance tax: Who went first?

For married couples (or civil partners), when one spouse dies their estate is administered in accordance with their will (if valid), or under the law of intestacy. Any inheritance tax (IHT) liability will be calculated accordingly. Simultaneous deaths What happens if both spouses died in circumstances where it is not known which of them passed… Read More »

Child’s income: Or is it?

Parents sometimes wish to gift income-bearing assets (e.g. company shares) directly to their unmarried minor children, to take advantage of the child’s personal allowance (and dividend allowance) and possibly also their basic rate income tax band, to reduce the family’s overall tax burden on dividend payments. Unfortunately, this tax planning idea is generally blocked by… Read More »