In 2010, London became the highest-taxed financial centre in the entire world when the government announced the new 50% income tax rate for those earning upwards of £150,000. Though this move would likely only affect the wealthy 1%, it still imposes heavily on the citizens of London.
That is why you should be aware of all the taxes you need to pay as a resident of London or of the UK. While there are “popular” taxes, like income tax and property tax, there are also those that may not be widely known.
Here are some of the taxes you may not, but should be, paying. Consult with an accountant for a more complete list of the taxes you need to be considering as a resident of the UK.
Paying Tax on Property Being Rented Out
If you or your company are renting out property, then there are corresponding taxes that you need to pay to avoid any penalties. Firstly, you need to inform HM Revenue and Customs that you are renting out property. Then, you have to pay the amount designated for your unique situation.
There are two categories under this: tax for properties you personally own and tax for properties your company owns.
Personally owned properties
If you are renting out property that you personally own and your income from the property rental exceeds £2,500 a year, then this should be declared on a self-assessment tax return. Otherwise, you may call HMRC for more guidance.
You should count the rental income in the same way as you calculate other business income. You need to be aware that there are different tax rules for residential properties, furnished holiday lettings, and commercial properties. You should consider hiring accountants in central London like www.gsmaccountants.co.ukto help you correctly identify and pay the taxes due for your property.
Paying Tax on Buying Shares
You may not be aware, but whenever you buy UK shares, there is a tax or duty on the transaction, the Stamp Duty Reserve Tax for “paperless transactions.” Transactions including buying existing shares in a company that is incorporated in the UK, rights arising from shares, options to buy shares, interest in shares, or shares in a foreign company that maintains a share register in the UK are all taxable.
Paying Tax on Selling Shares
When you profit from selling shares, then you may have to pay Capital Gains Tax. You don’t have to do so if you’re giving away shares to your spouse or civil partner, as long as you’re not giving away shares you are planning to resell or you’ve lived together for part of the tax year when the shares were given away.
There are many more rules regarding these three uncommonly known taxes. Be sure to consult an accountant to make sure that you are doing your taxes completely and accurately. A misstep in filing or paying your taxes can result in heavy penalties and an uneasy mind. It can even cause you legal troubles down the line.
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