HMRC Admin 25 Response

Hi Masquedefer Curran,
In order to qualify for the full starting rate for savings allowance, you will need to earn below the basic rate of income tax  threshold.
This is currently £12570.
If you earn under this amount, you can earn an additional £5,000 in interest tax free.
However, for every £1 you earn over this amount, you lose £1 of the starting savings rate allowance.
Please have a look here for more information:
Tax on savings interest
From the informatin provided, the starting rate for savings would be £5000.
The maximum you can pay into your pension scheme is £3600.
Thank you. 

 

Hi tcoatdan Coates,
If you will be self employed with this second source of income and you earn more than £1000.00 in a tax year, you will need to register for Self Assessment, as self employed.
 Set up as self-employed (a 'sole trader'): step by step
As self employed, you would need to keep records of your turnover and allowable expenses.
You would be able to claim either £1000 trading income allowance against your gross profit or set your allowable expenses against the gross profit.
The resulting net profit, will be subject to tax and National Insurance, taking into account the National Insurance paid against your employment income.
Self assessment will work out how much this is and will collect it along with the tax payable.
Thank you 
 

Hi Fantree,
There are two taxes in question here.
Capital Gains tax on the disposal of personal assets and income tax on profits of items bought and sold with the intention of makinga profit.
The trading income allowance is only available to set against profits for income tax, where your are self employed as a sole trader.
It cannot be set against capital gains arising from the disposal of personal assets.
If you dispose of a single asset or a collection of items, for more than £6000, you are required to declare it.
Have a look at:
Report and pay your Capital Gains Tax.
Thank you. 

 

Hi CheesyPanda,
If your Self Assessment record is set up to include voluntary Class 2 payments as part of the calculation and is paid on time, then the voluntary payment will filter through to your NIC record.
We cannot advise how long this will take.
If you SA record is not set up to accept voluntary Class 2 NIC, then it will not form part of the calculation, even if you tick the voluntary Class 2 NIC box.
In this case, you will need to contact the NIC helpline on 0300 200 3500, to arrange a voluntary payment.
They will be able to update your self assessment record to accept voluntary payment in the future.
Thank you. 

 

Hi Topherstewart11 Stewart,
You do not own the tied accommodation, so if you purchased a property and you are a first time buyer, you should still be able to purchase with your life time ISA.
The age limits (18 -40) only apply when opening a life time ISA.
Please have a look at the guidance here:
Lifetime ISA
Your ISA provider should also be able to provide you with more information.
Thank you. 

 

Hi zontes,
In your UK Self Assessment tax return, you can claim a Foreign Tax Credit Relief (FTCR) of up to 100% of the capital gains tax paid in Spain.
If the tax paid in Spain will be more than the capital gains tax payable in the UK, your FTCR would equal the UK tax payable.
In this way, you are not paying the same tax twice.
Thank you. 

 

Hi Goodsummer123,
Your disposal value is reduced by your acquistion costs and disposal costs such as soliciors fees, estate agent fees, auctioneer fees, stamp duty, to arrive at the capital gain.
Only then can you apply your private residence relief (97/xxx) against the gain to work out how much the gain can be reduced by private residence relief.
The remaining gain can then have losses carried forward applied, before the annual exempt allowance.
Thank you.

 

Hi Pdig,
You need to report losses to HMRC if you wish to claim loss relief and carry the losses forward to a future tax year.
You have 4 years from the end of the tax year the losses arise in.
Leave it too long and you are out of date and losses cannot be claimed for.
You either claim for losses in writing, providing supporting evidence or in a Self Assessment tax return for the tax year the losses arise, again, including supporting evidence.
Only after the losses have been claimed/agreed, can you set the loss againt the future year gain.
You would calculate your capital gains and deduct the agreed losses from the gain.
The remainder is then subject to Capital Gains Tax, depending on what type of capitat gain you have.
Residential property capital gains are taxed at the lower rate of 18% and the higher rate of 24%.
Other forms of capital gains are taxed at the lower rate of 10% and the higher rate of 20%.
Thank you. 
 

Hi Amethystar,
Please have a look at the guidance here:
Business records if you're self-employed
We cannot advise you how to apply accounting practice, as we are not accountants.
Thank you. 

 

Hi Stephanie Vincent-Squibb,
There is no Capital Gains Tax liability on the transfer of assets between husband and wife and civil partners.
Helpsheet HS281 advises ""If you and your spouse or civil partner were living together at some time in a tax year, you can transfer assets between you at no gain or loss any time up to earlier of the end of the third tax year after that in which you ceased to live together or the date on which a court grants a divorce or annulment of marriage, or dissolution or annulment of a civil partnership.
Transfers of assets between you or your spouse or civil partner in accordance with a formal divorce or separation agreement or court order will be at no gain or loss without any time limit"".
HS281 Capital Gains Tax civil partners and spouses (2024)
Thank you.