Employees Most employees under state pension age pay Class 1 contributions. The primary contribution is by employee and the secondary contribution is by employer. They are percentage based contributions levied on gross earnings in excess of a certain sum. Earnings are all earnings paid in cash or readily convertible to cash. NIC are paid on […]
General As in Ireland, there are a number of share option and share purchase schemes, which receive favourable tax treatment. They represent a means of rewarding and incentivising employees on a tax efficient basis. A share option is an offer to an employee of a right to purchase shares at a future date at an […]
General UK Corporation tax is similar in structure to Irish Corporation Tax. UK Corporation Tax is paid by limited companies and some other entities, on their profits and gains. The rules applicable to Corporation Tax are similar to those that apply to Income Tax in relation to income and capital gains tax in relation to […]
Basis of Tax Computation UK resident companies are taxed a Corporation Tax on their income and chargeable gains arising in an “accounting period”. This will usually be the 12 month period of the financial accounts. However, the applicable accounting period is subject to special rules set out below, as is the case in Ireland. This […]
Returns Companies are subject to an obligation to self assess their liability for tax in the same way as individuals. They must therefore calculate their own Corporation Tax liability and submit a self assessment return. The return must be made within 12 months at the end of the accounting period. The Corporation Tax must be […]
Nature of Capital Gains tax Capital Gains Tax is a tax on the rise in value of an asset. CGT arises when an asset is “disposed of”, which will usually be by a sale but will also occur on a gift or on the receipt of any capital sum where an asset is destroyed e.g. […]
Changes in Rate and Reforms UK Capital Gains Tax (CGT) was reformed significantly in 2008. A range of exemptions and reliefs which used to apply, were removed. Many of these exemptions had reduced the effective rate of tax to as low as 10%. Formerly taper relief was available to reduce the capital gain by up […]
Company Subject to CGT Rules Company’s capital gains and losses are computed in accordance with general Capital Gains principles. The same general capital gains tax rules apply. There is no exempt amount in respect of capital gains tax for companies. This is in contrast to the position for individuals. Where capital losses arise they are […]
Investments Capital gains tax issues arise in relation to investments in companies or partnerships. If a loan is given to a sole trader, partnership or private company, a CGT loss may arise if the Revenue is satisfied that the loan has become irrecoverable. There are various conditions. In particular the borrower must be resident in […]
Assessment of CGT CGT is assessed for all gains and losses by the taxpayer in the tax year 6th April to the following 5th April. The Tax is payable by the 31st January in the following year. The date which triggers CGT liability is the date of the sale contract rather than the date upon […]