Applying CGT in Divorce Cases, Reports for the Court

Applying capital gains tax (CGT )in Divorce Cases

More often than not, a divorce will result in assets being transferred from one spouse to another. Read on for a better understanding of the application of CGT, including how and when it is used. You may need to produce a capital gains tax report for the court.

When a marriage breaks down, no one ever thinks of the tax obligations that may arise from subsequent happenings. However, it is important to do some tax planning as this can have some significant benefits for both parties.

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Transfers between Spouses

Taxation of Chargeable Gains Act 1992 Section 58 has the provision asserting that if civil partners or spouses that happen to be living together transfer assets in a tax year, the transfers are deemed to be made on a no loss/no gain basis.

The implication is that the person who receives the asset will be treated like they paid an amount equivalent to the total of the original cost of acquisition.

Transfers between Spouses in the Year of Separation
The no loss/no gain treatment is also applicable to transfers between civil partners and spouses for the remainder of the year that the separation is reported, even if the civil partners or spouses may not be living together when the transfers are made.

If dissolution of a civil partnership or a divorce happens in the same year in which the separation was reported, the no loss/no gain treatment is applicable to all asset transfers made after the dissolution or divorce as long as they happen before the end of the tax year.

The ICTA 1988/S 282 defines living together. A woman is deemed to be living together with the husband unless she can show that (a) she separated in circumstances that are likely to make the separation permanent (b) she has a formal deed of separation (c) she separated under a court order.

According to the ruling in Holmes v Mitchell STC 25, a couple may be deemed separated even if they still share a residence. For instance, when financial considerations make it impossible for one civil partner or spouse to move out or when the parties desire to minimize the initial harm that could be inflicted on the children.

Conclusion
In conclusion, capital gains tax on transfers between civil partners or spouses is not payable in a year in which they still live together. This will still be applicable for the entire year in which they got separated. You may have to pay capital gains tax if the asset transfer is done in the year following the separation. The assumption made in such an instance is that the transfer is made at market value. The reasoning for this is that the spouses are still connected to each other until the provisional decree of divorce is proclaimed.

In an ideal situation, the asset transfers if they may attract chargeable tax should be conducted before the end of the tax year of separation. In an instance in which asset transfers could result in tax liability on capital gains, a transfer made in different years may be the best option. The reason for this is that you can reduce the

total payable amount since you get to enjoy two annual exemptions. If the transferor civil partner’s or spouses capital gains tax are likely to be lower in a given tax year as compared to another, then delaying, accelerating or asset transfers could be one way of improving their capital gains tax position.

GM Professional accountants have offices locates in Manchester, London, and Essex.

Accountants Guide for Courier Drivers

COURIERS’ TAX RETURNS

Online shopping is one of the most developing segments in business. The development of online shopping has led to the creation of more jobs. One of the tasks that online shopping has created is courier freelancing.

How To Become A Freelance Courier

The first thing you need for you to work as a freelance courier is a van. You can use your van, or if you don’t have, you can hire. A freelancer courier can take jobs from courier companies like UPS or FedEx. Also, if you are capable, you can begin your own courier company.

Pros and Cons of The Two Courier Options.

– If you have to work under any other courier service as a freelancer, you will have no worry about how you will source for clients. However, your agreement with these companies will always tie you down.

– If you begin your own courier business, you will have the freedom to choose the clients you can work for, and you will put in a lot of efforts. Your inputs either hard work or finances would determine how many clients you will get.

How to Advertise Your Courier Services

Are you planning to begin your own courier services company? There are a few tips that may be helpful you can use to get clients. Some of the techniques are:

– Develop a website. Developing a professional website will help in boosting the credibility of your company. You can list your services on the website and also the prices for your services. Also, the site is a good point where you can communicate with your clients.

– Social networking. There are a lot of social media platforms with steady users which you can use to grow your business. You can run adverts on these platforms where you can target individuals looking for freelance courier services. You can use Facebook, LinkedIn, Instagram or Twitter to create your market base.

– Business cards. A freelancer can design and printout business cards. The cards should show your services, names and also contact details. You can then give the cards to your friends, family members, and even potential clients.

– Create adverts. Not everyone uses social media. You can use local advertising as your medium of communication. Adverts are cheaper and quickly meet your target audience.

How To Become Better in Your Courier Services

If you begin your own courier company, the better you are at your job, the chances of getting more clients are higher. Some of the skills that some of the best couriers have are:

– Stick to deadlines. Once customers purchase or request for goods, they usually need them in a short time. Due to the loads of packages you have to deliver, it would be wise to create a plan which will allow you to

stick to their schedules.

– Have adequate knowledge of the streets. In case your navigation system breaks down during your deliveries, you need to have sufficient experience of every street. It will help you to keep time even without a nav system.

– Stay fit. Since you will be spending a lot of time sitting in your van, you need to be healthy. Also, you will need to be fit for you to load and off-load your van.

– Be a good driver. This is one of the essential requirements that you need. You should have a valid driving license and also stick to the Highway Rules.

Accounting as a Courier.

There are a lot of benefits that you will enjoy in being a freelance courier. However, as a freelancer, there is one major challenge which is accounting. If you are employed, your tax is taken care of in the PAYE form. As a freelancer, You have to prepare your financial records and pay for the Self-assessment tax return. It’s done annually, and it may be challenging for you. It can distract you from your busy delivery schedules.

Getting Accountancy and Tax Advice.

You can contact GM :Professional accountants to prepare your the financial records at the end of the year. We specialise in this sector and provide bookkeeping, tax return services and company accounting services.  For the courier agency to operate smoothly, we will provide general tax advice on accounting and tax returns. It will be perfect if you keep your records up to date each month as this will allow you to make an informed decision.