Following on from last month’s blog we promised to provide further assistance and tips on how to add great value to your client relationships. You can check out our previous blog here
In addition to the age profile of your clients, there are various time periods which must be observed when claiming certain reliefs and exemptions:
· Client must be aged 55 or more
· A reduction in the relief at aged 66 or over – 750k to 500k
· Passing to a child unlimited relief to aged 66 and then 3m thereafter.
· The assets must have been owned for a 10 year period ending on the date of disposal.
· If it is a company, the client must have at least 25% of the voting rights and have been a working director for 10 years -5 of those years fulltime.
· A client who wished to retire at 55 should be reviewing their situation soon after they reach 40.
If an intra spouse share transfer is required, this should be done before either party reaches the age of 55. Otherwise the 750k threshold will be eroded.
Share Buyback trade benefit test
· If the retirement plan requires share buyback by the company, shares must been held for five year period ending on the date of the buyback
· The 80% test must, be passed at the valuation date
· If they are going to farm it themselves the beneficiary must hold or expect get an agricultural qualification within 4 years of the gift or inheritance
· If it is a gift, the disposer must have held the property for five years before the date of the gift
· If it is an inheritance, the disposer must have held the property for two years before the date of inheritance
· Are the contributions maxed out?
· Consider a company structure to increase premiums
· Maximum age for making a contribution is 75
· Review of state pension to confirm that there are adequate contributions
· Are any of the principal objects approaching 21 years of age, as this may trigger the 6% discretionary trust tax
Offshore Fund Investments
· Certain funds may be subject to the 8 year review requirement, any uplift in value since purchase or the last review would be taxable at 40%
· Note: this should be done early. Many investors sell units to pay the tax; if they delay, the unit price may fall before filing date
· Become resident in a treaty country with lower/no CGT tax, before a disposal
· Review client domicile with a view to utilizing the remittance basis
You can add value to your client relationships and thus add to your retention rate by being proactive and engaging with them to work towards their goals.
We hope you find this information useful. If you have any specific queries or require tax advice please don’t hesitate to contact us
We are tax advisers for accountants.