Year End Tax Review 2010/2011


Lead articles

Looking forward

This year, next year

Rate of change

Pension merry-go-round


Too much NIC

NIC and pensions

Company cars

Tax-free benefits

Childcare vouchers

Business - General

Time to incorporate?

Associated or not?

His and hers

Family bonus

Profit and loss

Show me the money

Can't pay, won't pay?

Turning back the clock

Business - VAT

Standard VAT or flat VAT?

VAT's up again

All Europeans now

A good start for VAT

Happy returns?


Top-up savings

Rainy day money

Capital Gains

Gains favoured

Splitting gains

A place in the country

Holiday lets reprieved


Family fortunes

Where there's a Will

Credits and debits

Benefit going

Piggy banks

Still trustworthy?


Penalty shoot-out

Going online

Paperwork, paperwork

Pay tax later

Opportunity knocks again


Give and save

Non-Domiciled People

Home and away


Interesting times

A place in the country

The property market has been the source of big profits in recent years. Even if the recession has increased uncertainty, many people will own houses that are worth much more than they cost. Gains on your "only or main residence" are not taxable (unless you use part of it exclusively for a business purpose), but a second home or an investment property will be chargeable to CGT at 18% or 28%.

If you use more than one property as a residence - that is, you yourself live in them both - you can choose which one you want to be exempt from CGT. Although this might be the one that you live in most of the time, you are likely to obtain an advantage - and give yourself greater flexibility in the future - if you make an "election" within two years of acquiring the second home. For example, if you decide to sell the "second home" first, or if the gain on it is larger than the gain on your main home, it might be useful for it to be exempt. This has had a bad press lately because some MPs were using the rule for houses which taxpayers were already buying for them - and they weren't living there at all. But it can be a perfectly respectable plan.

You can only elect for a "residence" to be exempt, not an investment property that is let out to others. So a "buy-to-let" property is chargeable to CGT. But if you are letting out a property that you have lived in, or you move to live in a property that you have let out, you can enjoy significant extra reliefs.

Action Point!
Do you have a second home? Do you want to "move-to-let"?