(Tax Saving) If you have federal Estate Tax liability and are married it is beneficial to have separate Living Trusts for each spouse. Otherwise, using a Living Trust or a Will doesn't affect tax liability.
If you are self-employed and your spouse helps out with general administration, or any other role, it is quite legitimate to pay your spouse a salary. However, there are a few rules that need to be followed, such as how much to pay your spouse and have evidence that the payments were made during the year. Sole traders with higher rate tax liabilities will benefit significantly from this arrangement and further tax savings could be made by setting up an employer pension scheme.
Are you selling that second or third home and want to reduce any capital gains tax that you may need to pay? The garden shed and other fixtures and fittings are treated as wasting chattels for Capital Gains Tax, i.e. when you sell them there is no tax to pay. Why not ask your solicitor to allocate part of the selling price in the contract to these items? Make sure you seek advice regarding Stamp Duty Land Tax when considering these issues.
It may be possible for a company to lend an employee up to £5,000 with no tax implications for them, provided they are not a director. This can be useful if say the employee needs to buy his company car to avoid benefit in kind tax charges.
If you claim tax relief for the use of a room as an office there can be a tax charge when you later sell your home, however we can advise you of measures that can be taken to help to minimise or mitigate a capital gains tax liability.
Stock should be valued at cost, but can be valued at 'net realisable value' if this is a lower figure. Essentially this means valued at what you could sell the stock in an open market sale. Lowering the value of closing stock will £ for £ reduce taxable profits.
Recover VAT on invoices that you have paid or received before you registered for VAT by including the input VAT on your first return. Make sure you have the VAT invoices and keep a schedule of the adjustments you have made. Be careful though, there are time limits and rules for this recovery measure so be sure to speak with your accountant!
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We provide general guidance on various Tax Saving Strategies.
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