April 2022 Newsletter | Cylchlythyr Misol Ebrill 2022
When a self-employed individual registers for self-assessment with HMRC, they are also required to file a 'CWF1' form. This is what allows HMRC to link your National Insurance payments from your tax return to your National Insurance record.
We recommend that self-employed individuals check their National Insurance record to ensure that their record reflects the NI payments made via their tax returns. If discrepancies are identified, please contact your accountant. To check your NI record:
Welsh language helpline - 0800 731 0453
English language helpline - 0800 731 0175
If you are asked to be a guarantor for a loan, consider this very carefully as you will be held liable if the individual cannot or does not pay. Never act as guarantor unless you have known the person for a long time and have a lot of trust in their financial acumen. It is usually acceptable for rent/mortgage for your children. Do not sign any document for “joint and several liability” if, for example, your child is renting a house with other young adults. Tough love may be required!
A number of people have fallen victim to 'impersonation' scams recently where fraudsters claim to be your bank and notify you that there is an 'issue' with your account. They inform you that, for safety reasons, funds should be transferred to a different account, or they trick you into sharing passwords or personal information.
The scammers can even make it appear that they are calling from the same number as your bank. Your actual bank will never ask you to move money to another account therefore if you are unsure as to whether they are scammers, put down the phone!
Ask Huw & Aled: I have read online that many celebrities have reduced their inheritance tax (IHT) exposure by using various tax planning strategies. Can you tell me a little about the different options available? We have already discussed “Deeds of Variation”, tax efficient investments and the "Ronnie Corbett" loophole.
When Bruce Forsyth passed away, in order to avoid paying any inheritance tax he left all of his £11,500,000 estate to his third wife, claiming full spouse exemption. However, his simple will, whilst initially avoiding inheritance tax, did not solve all problems.
- His wife was left with the responsibility of planning / distributing the estate. There may be a substantial inheritance tax liability when she dies.
- His 6 children from his 3 marriages received nothing in the will as any gifts which in total exceeded £325,000 would have been subject to 40% inheritance tax. Whilst Mr Forsyth may have “verbally agreed” that his wife would then transfer some assets to the children there was no guarantee that this would happen. She could refuse / remarry / die intestate (without a will).
- The distribution of assets for similar families is a difficult issue and can cause great tensions within families. Plan your will carefully and if possible, try to explain to your loved ones your thoughts and reasoning.
