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46 Financial Advice Keep the taxman at bay


As certain celebrities are getting their wrists slapped for engaging in aggressive tax avoidance scandals, Gill Wadsworth points out that it’s worth remembering there are more honest ways to limit the amount you pay to Her Majesty’s Revenue & Customs


G


iven the complexities of the UK tax system, it’s no surprise that some of us end up paying more tax than we


should. However, there are some simple ways to make the most of the tax breaks on offer. Te first is to ensure you’re on the


correct tax code. Tis appears on a payslip and can be checked on the HMRC website. Lower earners and those with children may also be entitled to tax breaks. Te system is complicated, changes all the time and may require a visit to Citizens Advice to ensure the appropriate concessions have been made. Irrespective of income, the next


most obvious route to making the most of your money is via saving and investments. Sarah Coles, personal finance


analyst at Hargreaves Lansdown, says successive governments have been keen to encourage people to save and invest by setting up some pretty generous tax breaks. She adds: “So, while investment


decisions should never be dictated by tax considerations, we’d be foolish not to take advantage of the opportunity to pay less tax where we can.”


IMAGE: GETTY Individual Savings Accounts


(ISAs) have proven incredibly popular in the UK; figures from the Office for National Statistics reveal that at the end of the 2016/17 financial year, UK savers had committed £585bn to ISAs. ISAs have an annual allowance


of £20k for the tax year 2018/19, which can grow free of tax. Further, investors in stocks and shares ISAs can switch to alternative vehicles without incurring capital gains tax. Coles says stocks ISAs look


particularly tax efficient next to the direct purchase of shares. Coles says: “If you make stock


market-based investments, you don’t have to pay capital gains tax or dividend tax on your returns in an ISA. Tis is particularly valuable now that the dividend tax allowance has been cut from £5k a year to £2k, and tax on the excess can be charged at anything up to 38.1%.” Specialist ISAs also exist on the


market to offer tax efficient means to save for specific purposes. Te Help to Buy and Lifetime ISAs, for example, include contributions from the government alongside


Continued on page 48


FINANCIAL SERVICES DISTRIBUTED WITH


Good news: You probably paid too much tax on your home


Yes, you. Right there, looking at this page


Did you know there’s as much as a 75% chance that you paid the incor- rect amount of Stamp Duty Land Tax (SDLT) when you bought your home? Of the people who get Cornerstone to check their previous SDLT payments, three-quarters of them have done so.


Why is that good news, you


may ask? Simple — because Cornerstone is here to help you find out if you over- paid your SDLT, and it’s completely free until you successfully get your money back from HMRC. What have you got to lose? With more than 15 years’ worth


of dedicated experience advising purchasers, investors and solicitors on all aspects of SDLT, your matters couldn’t be in safer hands. SDLT is becoming increasingly


complicated, with various additions, exemptions and adjustments contin- ually being added to the legislation, and with most people simply relying on their solicitor to complete a tax return on their behalf, it’s no wonder that so many seem to be overpaying.


But don’t just take Cornerstone’s word for it: “Accountants would probably say it’s a property matter, and should


be dealt with by a solicitor, but we would say it’s a tax matter, so are we qualified to advise?” asked prop- erty lawyer Sara Dwight in an article published in Te Times on 11 August 2018 headlined Tax Rules ‘now impos- sible to fathom’. “[HMRC] says that the online


calculator [provided by the tax office on its website to help calculate SDLT liability on a purchase] is meant to be a guide and not a final figure,” said in article published on Te Mail Online, on 31 March. Te article was titled Homebuyers may be owed £2bn in overpaid stamp duty because the government’s online calculator gets its sums wrong. “It’s a tax that’s administered by


solicitors who aren’t tax experts. When it was simple, that was fine but now it’s complicated,” said Nimesh Shah, partner at Blick Roth- enburg, in an article published in Te Telegraph on 23 June. Te story was published under the headline Nine in ten solicitors don’t understand stamp duty: here are the loopholes they might have missed. In fact, there’s absolutely no


reason why you shouldn’t use a specialist adviser to look specifi- cally at your SDLT liability for every purchase you make.


To find out more and get a free check


to see whether you may have overpaid on your purchase, contact Cornerstone at E: SDLTCheck@ctatax.uk.com T: 01858 439055


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