Investment & Investing

Yes, they are a UK resident, pay UK income tax etc.

I'm not sure if the estate was big enough to qualify for IHT in Portugal, it would have been below the UK threshold.

I'm thinking that any CTG would be on the difference between whatever the value assessed for IHT and the value now, which again is likely to be a small number.

So in essence; declare for UK tax and seek to offset any tax already paid abroad?

Tax when you sell property

Selling overseas property

You pay Capital Gains Tax when you ‘dispose of’ overseas property if you’re resident in the UK.

As for it in the IHT, it would depend on whether the friend's mother was UK domiciled. IHT is otherwise not payable on assets outside the UK.

Oh that’s interesting, did not know. Thanks

ah - that's useful to know; thank you .

I'm not a tax accountant / lawyer, obvs, so seek professional advice etc...

The HMRC help pages are all pretty good on this, to be fair.

Webinars good too, with ability to ask questions to the experts.

How do companies with cash reserves >£85K protect themselves from losing the lot if their bank goes busto?

Move some into a business savings account with different institution

Moving into separate accounts at different institutions works if that's manageable. I.e. smaller company with not millions in cash reserves.

The larger the company the more I would expect them to have a defined risk tolerance with a few larger banks in their roster and a regular review and rebalancing of levels of cash at each.

Any such company (in the same way the banks do) should be reviewing their banks annually at a minimum in order to ensure they remain only with the most stable and secure banks.

I work in a bank. This question has come up.

Do they do this in reality though? What if the company had >£1M?

I gave up trying last year as the KYC/application process with a different bank was such a ball ache and there were very few options for business savings. Admittedly I haven't looked recently.

Thanks. We're with NatWest which I hope has a degree of security being nearly 40% government owned but it still makes me twitchy. I could definitely see the benefit to at least one other institution.

Companies hate having large cash reserves I'd have thought. Means they can't borrow shit, makes them look like they don't know what to do with it.

If it's your cash because it's come from working through a LTD, invest it or pay down debt.

The other issue is HMRC doesn't like companies keeping piles of cash for a long time. It expects that excess cash will be distributed as dividends and taxed accordingly. Hoarding cash risks being seen as trying to avoid tax on dividends to get Entrepreneur's relief / BARD later on.

Thanks all, we'll approach dividends when work is a bit quieter but we'd be mad to not lock some cash up at 5%.

Unless you need to keep a certain amount as capital requirements. Obviously banking is different to other industries and you are correct. Even with higher rates currently larger cash reserves should be made to work in investments ideally

I've got both.

I use Revolut for cards on the move and Wise for bigger, one off transfers. On our recent trip to the US, I'd told my mates about this and they ended up with Wise cards. So I could probably use Wise instead of Revolut but I like some things Revolut does (two cards on one account).

As for rates, I don't look carefully enough. I just assume they're both cheaper than any other option and use one of them.

Thanks. I already opened a Wise account, so good to get affirmation.

Interesting. Are HMRC in a position to advise on working capital requirements?

I'd have thought not, maybe it depends on the scale of the cash pile.

A while back my father fell out with his business bank and as result moved to working capital rather than borrowing to run his firm (by minimising dividends and other cash outflows). He's not mentioned HMRC not liking it.

Edit: also has anyone told Berkshire Hathaway about this? :)

Not working capital requirements. They don't do any setting of policy just enforcing typically.

Yes, it was a bit tongue in cheek about how a tax authority could legitimately argue against retained profits in a business. Maybe they can, but I've not heard of it before.

I think it applies in a narrow case, where the company is wound being wound up, rather than an ongoing concern, and it applies to the shareholders, rather than the company.

TAAR: targeted anti-avoidance rule.

https://www.gov.uk/hmrc-internal-manuals/company-taxation-manual/ctm36305

No published limits on what is reasonable. HMRC interprets the rules as it sees fit, not worth fucking with them. Of course they only go after small businesses, Berkshire H would no doubt cut a sweet deal with them if it were here.

As TW says, it only really matters when you apply for the tax relief after closure, they'd look at it then. I don't expect they look at it as a matter of routine. This scenario may be irrelevant for the person who first raised it, but just mentioned it as I've recently become aware of it.

Not sure if it’s a here question but can you get combined PMI and Life Insurance policies?

https://www.vitality.co.uk/individuals/