Your tax questions answered - Investments
Below are the 4 database entries on the subject of Investments.
I recently sold my 60% share in a trading company that I've been a director of for over 20 years. The sale included ordinary shares that had full voting rights, and preference shares, which had no voting or conversion rights, just the right to a fixed dividend. Can I claim entrepreneurs' relief on the gain arising on both types of shares or just in respect of the gain on the ordinary shares?
As you held at least 5% of the ordinary voting shares and were a director of the company for one year up to the date of sale, entrepreneurs' relief should apply. Although the conditions for entrepreneurs' relief refer to ordinary voting shares, the gains arising on both the ordinary shares and preference shares can be included in your claim for entrepreneurs' relief. If the sale was concluded on or after 6 April 2010 the maximum gain that can be covered by entrepreneurs' relief is £2 million, for sales before this date the maximum gain that can be subject to an entrepreneurs' relief claim is £1 million.
As you held at least 5% of the ordinary voting shares and were a director of the company for one year up to the date of sale, entrepreneurs' relief should apply. Although the conditions for entrepreneurs' relief refer to ordinary voting shares, the gains arising on both the ordinary shares and preference shares can be included in your claim for entrepreneurs' relief. If the sale was concluded on or after 6 April 2010 the maximum gain that can be covered by entrepreneurs' relief is £2 million, for sales before this date the maximum gain that can be subject to an entrepreneurs' relief claim is £1 million.
I pay tax at the highest rate. What extra tax do I have to pay on my share dividends?
If you pay tax at the higher rate you will be liable to tax at 32.5% on the gross dividend. From 6th April 2010, if you are liable to the additional higher rate on income over £150,000 then you will be liable to tax of 42.5% of the gross dividend.
However, each dividend carries a 10% notional tax credit which will be offset against the additional liability.
If you pay tax at the higher rate you will be liable to tax at 32.5% on the gross dividend. From 6th April 2010, if you are liable to the additional higher rate on income over £150,000 then you will be liable to tax of 42.5% of the gross dividend.
However, each dividend carries a 10% notional tax credit which will be offset against the additional liability.
My income is really low, and I do not pay tax. It seems unfair that I have to pay tax on my bank interest just to claim it back at the end of the year.
You can register for the tax to be paid "gross", that is without tax being deducted. Just ask your bank or building society for form R85.
You can register for the tax to be paid "gross", that is without tax being deducted. Just ask your bank or building society for form R85.
Why does my tax return ask for details of my bank interest as I pay tax on the interest already?
Interest paid on bank accounts is taxed at 20% before it is credited to your account. However,if you pay tax at 40% you will be liable to pay an additional 20% on the gross interest received.
From 6th April 2010, if you are liable to the additional higher tax rate on income over £150,000 then an additional charge of 30% on the gross interest will be due.
Interest paid on bank accounts is taxed at 20% before it is credited to your account. However,if you pay tax at 40% you will be liable to pay an additional 20% on the gross interest received.
From 6th April 2010, if you are liable to the additional higher tax rate on income over £150,000 then an additional charge of 30% on the gross interest will be due.
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