December Questions and Answers

Newsletter issue - December 2016.

Q. My wife doesn't work. Can she transfer her unused personal tax allowance to me?

A. Since April 2015, it has been possible for a spouse or civil partner who is not liable to income tax or not liable above the basic rate for a tax year, to transfer part of their personal allowance to their spouse or civil partner, provided that the recipient of the transfer is not liable to income tax above the basic rate.

The transferor's personal allowance will be reduced by the same amount. For 2015/16 the amount that could be transferred was £1,060, rising to £1,100 for 2016/17. The spouse or civil partner receiving the transferred allowance will be entitled to a reduced income tax liability of up to £220 for 2016/17 (£212 for 2015/16). Note, however, that married couples or civil partnerships entitled to claim the married couple's allowance are not entitled to make a transfer.

Q. I am currently in the process of purchasing a property which includes a separate granny annex. Since there is only one title number for the whole property, can I apply for stamp duty land tax multiple dwelling relief (MDR)?

A. Broadly, if the granny annex is an independent dwelling, then it will count for MDR. If it cannot exist independently of the main house, then MDR will not be available.

The HMRC Stamp Duty Land Tax Manual states (SDLTM29955):

'For the purposes of the relief a "dwelling" means a building or part of a building which is suitable for use as a single dwelling or is in the process of being constructed or adapted for such use.'

Special rules apply to certain types of dwellings, including halls of residence and 'off plan' transactions. See the HMRC Stamp Duty Land Tax Manual for further information.

I bought a flat in 2000 and paid £100,000 for it. I left the UK in November 2003 to work overseas and it has been rented out since then. I have not returned to the UK since I left and I now live permanently in France. I am thinking of selling my UK flat, which is now valued at £300,000. What are the tax implications of doing this?

A. The tax implications for non-UK residents selling UK residential properties changed in relation to disposals after 5 April 2015. Prior to then, there would have been no UK capital gains tax to pay. Unfortunately, after that date, the disposal will be subject to capital gains tax based on the value of the gain between 6 April 2015 and the date of sale. There are different ways of calculating the gain and you can use HMRC's online calculator to work out the amount of tax due. You must tell HMRC within 30 days of conveyance, for example no later than 31 July if you convey on 1 July. HMRC may impose penalties where the reporting deadline is missed and interest will be payable on tax not paid by the normal due date. See the HMRC website at https://www.gov.uk/guidance/capital-gains-tax-for-non-residents-uk-residential-property for further information.

Get a fixed quote

Fixed prices for agreed services

FAIR FEE POLICY. We believe you should always be in control of your fees with no surprises. You are entitled to a competitive fixed quote for agreed services, which is exactly what we charge, not a penny more. Most clients choose this option although if you prefer to pay an hourly rate we can arrange that too.

To receive a fixed quote for your specific circumstances either arrange a Free No Obligation Consultation or submit the form below. The form is designed for most of the routine accountancy services. If you require something more specialist, please contact us directly. If necessary we will contact you for further information.

If you are a new start up business, please use estimates. Full quotes are provided within 2 working days.

FIXED QUOTE REQUEST FORM »

Make more, keep more, work less

Get the right advice and take action

MAKE MORE

Have clear goals including long, medium and short term for what you want to achieve and develop a roadmap to get you there... read more »


KEEP MORE

Use our Tax Planning Service to ensure you don’t pay a penny more in tax than is necessary... read more »


WORK LESS

Work ON your business and not IN your business - work ON your systems so the systems run the business and your people run the systems, leaving you free to have more holidays... read more »

Start Up

Are you looking to start a new business?

Choose your business size to see how we can help you

Small

Key points for our small business clients to know

Choose your business size to see how we can help you

Medium

Help and assistance for medium sized businesses

Choose your business size to see how we can help you

Large

See our extensive range of services for your needs

Choose your business size to see how we can help you