June 2021 Newsletter | Cylchlythyr Misol Mehefin 2021
The Welsh Government have reopened their Economic Resilience Fund for businesses that continue to be impacted by Covid-19 restrictions. The fund will close for applications at 5pm on 7 June 2021. Full details are available at:
https://fundchecker.businesswales.gov.wales/businesssupport
The total amount that can be paid into a personal pension during a tax year is restricted to the lower of 100% of your earnings and £40,000. For self-employed individuals who have received SEISS grants during the pandemic, HMRC have confirmed that they can treat this grant income as earnings for pension contribution purposes. In general, this will increase the amount that self-employed individuals can contribute to their personal pensions.
There was a time when the Santander 123 account was wonderful value. However, it now charges an annual fee of £48 and only pays interest of 0.3% up to a maximum deposit of £20,000 which is £60 per annum. Remember to search for the current accounts that are best for you.
If you are purchasing a house, one practical problem with payment is that banks often only allow a daily transfer limit of £25,000 online and if you visit a branch, a large lump sum payment can attract significant charges. Plan in advance to make a number of smaller payments to your solicitor over a number of days, if necessary. This may also avoid any bank charges.
Ask Huw and Aled: my mother, a rich widow recently passed away. She gifted £600,000 to us children 6 years ago. Can I claim for inheritance tax taper relief at a lower rate of tax?
There is no inheritance tax liability on gifts made 7 years or more before an individual’s death. Many individuals assume that if they make large gifts and survive between 3 and 7 years that they will pay a lower rate of inheritance tax by claiming 'Taper Relief'.
However, to qualify for taper relief the gifts must be for more than the person’s nil rate band. Normally this is £325,000. As the late mother was a widow, she is also eligible to receive the late father's nil rate band of £325,000, and consequently her nil rate band is £650,000. As the gifts are for less than this amount there will be no taper relief and all the gifts will be potentially liable for inheritance tax at the full rate of 40%.
If you are considering making large gifts and are unsure of the inheritance tax consequences, please get in touch.
