Edwards Greene Tax Tips 2020

KEY GUIDE | April 2020 | Tax Planning Tips 10 50 Realise gains free of UK CGT while living abroad. You can’t escape CGT on the sale of UK property while living overseas, but gains on other assets such as shares can be tax-free as long as you are non-resident for more than five years. The five-year clock starts from the day you become resident elsewhere. Levels and bases of taxation and tax reliefs are subject to change and their value depends on individual circumstances. The Financial Conduct Authority does not regulate tax advice. The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances. Occupational pension schemes are regulated by The Pensions Regulator. Your home may be repossessed if you do not keep up repayments on your mortgage or other loans secured on it. Think carefully before securing other debts against your home. 45 Encourage car sharing with tax-free payments to employees. Pay your employees an extra tax-free 5p a mile for each fellow employee they take as a passenger, when travelling to work- related training courses or making other business journeys using their own car. This allowance cannot be paid for regular commuting to work. 46 Don’t forget to party! Even the smallest business can host an annual tax- free social function for its entire staff, including the directors and their partners. As long as the cost per head is less than £150 (including VAT), employees are not taxed for having a good time and the company benefits from full tax relief on the expense incurred. 47 Supply your employees with one tax-free mobile phone each. Mobile phones provided to employees are tax-free, as long as it is the employer rather than the employee who owns the phone and takes out the contract with the telecoms company. 48 Encourage your employees to cycle to work with a subsidised bicycle. You can lend bicycles and associated safety equipment to employees for them to use to get to work and for any other private journeys. This can be done as part of a salary sacrifice scheme under which the employee foregoes pay in return for the use of the bicycle and equipment. The employee can normally purchase the bicycle at a significant discount at the end of the loan period, and there is no limit on the value of the bicycle which can be provided. Overseas aspects – planning if you leave the UK 49 Be careful of your UK residency status. Your UK tax residency status is determined on a year-by-year basis. If you are not automatically resident or non-resident, your status is based on the number of days you spend in the UK and the number of UK ties you have. There is no averaging of days of residence between tax years. You need to carefully count the days you are in the UK for work and pleasure if you want to remain non-resident for tax purposes, and monitor the number of UK ties that you have. However, some days may be left out of the count if they are regarded as exceptional circumstancesfore being able to return without any domicile consequences. Tip Two or more employers can cooperate to provide a works bus (Tip 42) for their employees. There will be no taxable benefit for the employees if the conditions are satisfied by looking at all the employees of each employer together. EXAMPLE Stephanie has two UK ties, so if she spends no more than 90 days in the UK she is treated as non-resident. However, during 2019/20, Stephanie spent 100 days in the UK because for the last two weeks of the tax year she was unable to travel back home overseas due to the Covid-19 lockdown. These final 14 days spent in the UK can be treated as exceptional, meaning that Stephanie will remain non-resident for 2019/20.

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