How to go Tax Free
Discussion
Hi
Whilst this question is hypothetical, i could be in a postion that could be recieving a large lump of money in the not too distant future. Heres hoping anyway. Now, the last thing i want to do is write a large cheque to Gordon and Alistair for the CGT ( I contribute enough!) and was sounding out the options for the legally avoiding paying the Tax.I am not married and have no kids, so moving country is very appealing also!
For the sake of arguemant and round figures the sum is cicra 1 million.
As far as I can make out, my options are as follows;-
a) take it on the nose, loose the 18%
b) move into a company, buy property as assets, live off the rental return
c) find somewhere to live that allows me to avoid the CGT
Can anyone shed any light on this? or, suggest some more creative ways of avoiding this??
all help appriecated!
Milo
Whilst this question is hypothetical, i could be in a postion that could be recieving a large lump of money in the not too distant future. Heres hoping anyway. Now, the last thing i want to do is write a large cheque to Gordon and Alistair for the CGT ( I contribute enough!) and was sounding out the options for the legally avoiding paying the Tax.I am not married and have no kids, so moving country is very appealing also!
For the sake of arguemant and round figures the sum is cicra 1 million.
As far as I can make out, my options are as follows;-
a) take it on the nose, loose the 18%
b) move into a company, buy property as assets, live off the rental return
c) find somewhere to live that allows me to avoid the CGT
Can anyone shed any light on this? or, suggest some more creative ways of avoiding this??
all help appriecated!
Milo
mylesmcd said:
Eric Mc said:
What is the nature of the large sum you are receiving?
gains from share dealing. 
Crystalise one gain before 5 April and crystalise the second after 5 April. In that way, you would be able to offset twi annual CGT allowances against each gains.
Do the assets being sold qualify as business assets i.e. are they eligible for the 10% CGT rate rather than 18%?
Eric Mc said:
mylesmcd said:
Eric Mc said:
What is the nature of the large sum you are receiving?
gains from share dealing. Crystalise one gain before 5 April and crystalise the second after 5 April. In that way, you would be able to offset twi annual CGT allowances against each gains.
Do the assets being sold qualify as business assets i.e. are they eligible for the 10% CGT rate rather than 18%?
I could, sell some before the end of this year, and the rest in the next tax year. I own a property marketing company also, which is why I had thought of investing the money in it, buy assets, to live off the rental return. Then live away for a year or two to avoid the Income tax?
in short, I dont think they qualify as business asset rate of CGT?
If you sell shares and make a gain but immediately reinvest the gain in some more shares, you should be able to avail of Rollover Relief. This defers the gain until the shares are finally sold for good.
You would need to check out the validity of investing in a company you actually already own - as it might be seen as a non "arms-length" transaction.
If the company generates rental income, it will be subject to Corporation Tax on its rental profits. You will be subject to Income Tax (and possibly NI) on any amounts you personally extract from the company. Obviously, you can mitigate the Income Tax and NI impact of monies drawn from the company by making judicious use of your Director's Loan account and/or Dividends - but there are limits to what you can do in these areas.
Also, if a company is deriving a subtantial part of its income and profits from investments (such as rental properties) it will not be classified as a "small trading company" for Corporation tax purposes. It therefore cannot avail of the special Small Trading Company Corporation Tax rates.
You would need to check out the validity of investing in a company you actually already own - as it might be seen as a non "arms-length" transaction.
If the company generates rental income, it will be subject to Corporation Tax on its rental profits. You will be subject to Income Tax (and possibly NI) on any amounts you personally extract from the company. Obviously, you can mitigate the Income Tax and NI impact of monies drawn from the company by making judicious use of your Director's Loan account and/or Dividends - but there are limits to what you can do in these areas.
Also, if a company is deriving a subtantial part of its income and profits from investments (such as rental properties) it will not be classified as a "small trading company" for Corporation tax purposes. It therefore cannot avail of the special Small Trading Company Corporation Tax rates.
Edited by Eric Mc on Tuesday 2nd February 11:00
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