Tax – Blue Orchid Accounting Solutions

Stamp Duty

admin — Tue, 11 Aug 2020 08:38:02 +0000

The rate of stamp duty / stamp duty reserve tax on the transfer of shares and securities is generally payable at 0.5 per cent.

8th July 2020 – 30th March 2020

Residential Properties | Stamp Duty Land Tax

Value up to £500,000	Nil
Over £500,000 to £925,000	5%
Over £925,000 to £1.5 million	10%
Remaining amount over £1.5 million	12%

Non-Residential Land and Properties | Stamp Duty Land Tax

Value up to £150,000	Nil
Over £150,000* to £250,000	2%
Remaining amount over £250,000	5%

From 1st April 2021
The below rates also apply if you bought the property before 8th July 2020.

Residential Properties | Stamp Duty Land Tax

Value up to £125,000*	Nil
Over £125,000* to £250,000	2%
Over £250,000 to £925,000	5%
Over £925,000 to £1.5 million	10%
Remaining amount over £1.5 million	12%

* £300,000 for first-time buyers, 5% SDLT on the portion from £300,001 to £500,000, same rates as above for remaining values from £500,001+. Special rules apply for new zero-carbon homes.

Non-Residential Land and Properties | Stamp Duty Land Tax

Value up to £150,000	Nil
Over £150,000* to £250,000	2%
Remaining amount over £250,000	5%

New Leases

Duty is charged according to the net present value of all the rental payments over the term of the lease (NPV), with a single rate of 1% on residential NPV’s over £125,000 and on non-residential NPV’s over £150,000.
VAT is excluded from treatment as consideration provided the landlord has not opted to charge VAT by the time the lease is granted.

Lease premiums

Duty on premiums is the same as for transfers of land (except that the zero rate does not apply where rent of over £600 annually is also payable).

Corporation Tax

admin — Tue, 11 Aug 2020 08:30:00 +0000

Corporation tax rates and bands are as follows:

Financial Year to	31 March 2012	31 March 2011
Taxable profits
First £300,000	20%	21%
Next £1,200,000	27.5%	29.75%
Over £1,500,000	26%	28%

Capital Gains

admin — Tue, 11 Aug 2020 08:29:19 +0000

Capital gains tax rates and bands for 2011/12

On chargeable gains
Total taxable gains and income: up to £35,000 from £35,001	18% 28%
Annual exemption
– individual	£10,600
– most trustees	£5,300
Chattels exemption
(proceeds per item or set)	£6,000

Entrepreneurs’ Relief

Qualifying gains will be taxed at 10%.
Claims may be made on more than one occasion up to a “lifetime” total of £10 million.

Notes

Transfers between husband and wife or civil partners living together are generally exempt.
Capital gains of all trusts for 2011/12 are taxed at the rate of 28%. Where there are several trusts created by the same settler, the annual exemption is divided equally between them, subject to a minimum exemption of £1,060 for each trust.

Value Added Tax

admin — Thu, 06 Aug 2020 13:31:01 +0000

From	4 Jan 2011	1 Jan 2010
Standard rate	20%	17.5%
VAT fraction	1/6	7/47
Reduced rate	5%	5%
Taxable Turnover Limits
Registration – last 12 months or next 30 days over	£73,000 from 1 April 2011
Deregistration – next 12 months under	£71,000 from 1 April 2011
Cash accounting scheme – up to	£1,350,000
Optional flat rate scheme – up to	£150,000
Annual accounting scheme – up to	£1,350,000

Inheritance Tax

admin — Thu, 06 Aug 2020 13:30:32 +0000

	2011/12	2010/11
Standard threshold	£325,000	£325,000
Combined threshold maximum for married couples and civil partners	£650,000	£650,000
Rate of tax on balance:
Chargeable lifetime transfers Transfers on, or within 7 years of, death	20% 40%	20% 40%

All lifetime transfers not covered by exemptions and made within 7 years of death will be added back into the estate for the purpose of calculating the tax payable. Tax attributable to such transfers is then reduced:

Years before death	0-3	3-4	4-5	5-6	6-7
Tax reduced by	0%	20%	40%	60%	80%

Main Reliefs
Business property:
– business or interest therein	100%
– qualifying shareholdings in unquoted* companies	100%
– land, buildings, machinery, or plant used by transferor’s controlled company or partnership	50%
Agricultural property	50% or 100%

*Unquoted companies include those listed on AIM

Main Exemptions

Most transfers between spouses and civil partners.
The first £3,000 of lifetime transfers in any tax year plus any unused balance from previous year.
Gifts of up to but not exceeding £250 p.a. to any number of persons.
Gifts in consideration of marriage or civil partnership of: up to £5,000 by a parent, up to £2,500 by a grandparent, or up to £1,000 by any other person.
Gifts made out of income that form part of normal expenditure and do not reduce the standard of living.
Gifts to charities, whether made during lifetime or on death.

Income Tax

admin — Thu, 06 Aug 2020 13:05:32 +0000

Income tax rates	2011/12	2010/11
Basic rate band – income up to	£35,000	£37,400
Starting rate for savings	*10%	*10%
Basic rate	20%	20%
Dividend ordinary rate	10%	10%
Higher rate – income over	£35,000	£37,400
Higher rate	40%	40%
Dividend upper rate	32.5%	32.5%
Additional rate – income over	£150,000	£150,000
Additional rate	50%	50%
Dividend additional rate	42.5%	42.5%

* Starting rate is for savings income up to the starting rate limit of £2,560 within the basic rate band. The rate applies to any balance of the limit remaining after allocating taxable non-savings income.

Income tax rates	Note	2011/12	2010/11
Trusts
For interest in possession trusts on all income, and other trusts on the first £1,000 of income (“standard rate band”):
dividend ordinary rate	5	10%	10%
savings income	5	20%	20%
other income	5	20%	20%
Income of other trusts above £1,000 is taxed at the special trust rates:
rate applicable to trusts		50%	50%
dividend trust rate		42.5%	42.5%
Personal allowance (PA)
under 65	1,4	£7,475	£6,475
65 to 74*	1,2,4	£9,940	£9,490
75 and over*	1,2,4	£10,090	£9,640
Blind person’s allowance		£1,980	£1,890
Married couple’s allowance (MCA)
Either partner born before 6 April 1935 (relief restricted to 10%)	1,3,4	£7,295	£6,965
Tax Shelters
Enterprise Investment Scheme (EIS) up to		£500,000	£500,000
Venture Capital Trust (VCT) up to		£200,000	£200,000
Golden Handshake max.		£30,000	£30,000
Rent a Room – exempt on gross annual rent up to		£4,250	£4,250
Construction Industry Scheme deduction rate:
Standard (registered)		20%	20%
Higher (not registered)		30%	30%

Notes

Ages are as the end of the tax year. Ages for the MCA relate to the elder spouse or civil partner
The higher rates of personal allowances are reduced by £1 for each £2 of excess income over £24,000 until the basic allowance is reached.
Similar limits apply to the married couple’s allowance. The reduction in allowance is subject to a minimum level of £2,800. (For couples married before 5 December 2005, only the husband’s income is taken into account. For those married on or after 5 December 2005 or in a civil partnership, only the higher earner’s income is taken into account).
For 2011/12 the personal allowance, including the minimum age-related allowance is reduced by £1 for every £2 that net adjusted income exceeds £100,000.
Where there are several trusts created by the same settler, the “standard rate band” is divided equally between them, subject to a minimum band of £200 for each trust.