February and March marks 6 Nations time for many. A beautiful time where rugby fans in the Northern Hemisphere come together to parrot the same phrases over, and over again in a bid to convince those around them of their own rugby expertise:
“You have to earn the right to go wide.”
“You should always take the points.”
Oh, and it’s simply not the 6 Nations without someone saying:
“Well, it depends which French team shows up.”
Much like the rugby fans who only watch the game for 5 weeks every year - leaving the rest of us (purists) rolling our eyes – there are plenty of people who come out this time of year shouting about tax planning without “Going through the phases”. What do we mean by this? Let us entertain you… Here are the top phrases you may be likely to hear from tax advisers in the next couple of months as tax year-ends come to an annual close.
Yes, the typical Annual Pension Allowance is £40,000. However, it might not be yours. You might be restricted based on a Money Purchase Annual Allowance, Tapering, relevant earnings restrictions, and other scenarios you’re not aware of. There might also be unused relief from previous years which may impact your allowance this year. So don’t jump to max out your allowance - check with your tax advisor to see if you are eligible for the full £40,000.
No idea where this saying came from. The Statutory Residency Test is far more complicated than this. We can think of so many examples of someone being in the UK for less than 90 days but still being a UK tax resident. There are many other factors to consider and how many days someone steps foot onto UK soil does not dictate how much tax they will need to pay!
This one could constitute good advice… I suppose the only issue with it is ensuring you haven’t already used your exemption on something else in the year. Transferring shares from a General Investment Account into an ISA is something which can trigger a gain, but would typically be within the £12,300 exemption.
However, another transaction in the same year could tip you over the threshold. It’s easy to do. Before you know it, you could find yourself over the exemption amount.
The 6 Nations and tax have more in common than you might think - it’s not just another excuse for James to talk about tax! Both are governed by laws which change every year, they are both far more complicated than they appear to be, and you probably won’t get any sense on either subject from someone who has just downed their 6th pint of Guinness. So the next time you hear someone who is spieling all the jargon in rugby or tax - ask them the questions that matter to see if they really do know their stuff!
P.S. Go Wales