Edwards Greene Tax Tips 18

2 Personal and family planning 1 Can you use the transferrable amount of the personal allowance? Married couples and civil partners can share some of their personal allowance between them. The unused allowance of one partner can be used by the other, meaning an overall tax saving for the couple. The amount you can transfer is capped at £1,190 for 2018/19 and a transfer is not permitted if either partner pays tax at a rate higher than the basic rate of 20%. 2 Contribute up to £4,260 into your child’s Junior ISA. The fund builds up free of tax on investment income and capital gains until the child reaches 18, when the funds can either be withdrawn or rolled into an adult tax-free ISA. Relatives and friends can also contribute to the child’s Junior ISA, as long as the £4,260 limit for the year is not breached. Any child aged under 18 who lives in the UK can have a Junior ISA if they were not entitled to a child trust fund (CTF) account, although a CTF can be switched to a Junior ISA. 3 Make sure you tell HMRC which of your properties should be treated as your main home for tax purposes when you buy a second (or even third) home. The property that has always been your main home is free of capital gains tax (CGT). Any other property where you have lived for part of the time will attract a CGT exemption for the periods you have lived there and have elected for it to be your main home. If a property has been your nominated main home at any time, the gain for the last 18 months of ownership (36 months if moving into residential care) is free of tax, even if you do not live there during that final period. The same does not necessarily apply where an overseas property is involved. 4 Check how much you are paying in national insurance contributions (NICs). If you have more than one job, you may overpay NICs during the tax year. You can reclaim any overpaid NICs from HMRC after the end of the tax year. However, you can prevent the overpayment occurring in the first place by deferring payment of NICs on one of your jobs by sending HMRC a completed form CA72A (either online or by post). 5 If you are getting married or entering into a civil partnership, and both own properties, you need to nominate one of them as your main home within two years of your marriage/civil partnership. Once married, you can have only one main home between you for tax purposes. If you both own separate properties which you continue to occupy for some periods nominate the one that is likely to make the best use of your CGT property 50 TAX PLANNING TIPS 2018/19 If a property has been your nominated main home at any time, the gain for the last 18 months of ownership is free of tax. Tip £