Year End Tax Review 2009/2010 Contents Lead articles The year ahead... This year, next year Pension hit Employees Too much NIC NIC and pensions Company cars Tax-free benefits Business - General Time to incorporate? His and hers Family bonus Profit and loss Show me the money Can't pay, won't pay? Turning back the clock Business - VAT Standard VAT or flat VAT? VAT goes down - must come up? European revolution A good start for VAT Happy returns? Investments Top-up savings Rainy day money Capital Gains Gains favoured Splitting gains A place in the country Holiday lets end Families Family fortunes Where there's a Will Credits and debits Piggy banks Still trustworthy? Administration Penalty shoot-out Paperwork, paperwork Pay tax later Opportunity knocks again Charity Give and save Non-Domiciled People Home and away Interest Interesting times

Gains favoured Recent falls in stock and property values may have turned CGT into a problem many people wish they had, but there are still lucky people sitting on unrealised gains that are exposed to tax at 18%. If the economy recovers - as we hope it will - investments bought now may be showing big gains in a few years. A lower rate of 10% is available to people who dispose of their own businesses - there's a limit of £1m of gains over your lifetime. The conditions for this "Entrepreneurs' Relief" are complicated and it's worth checking that you are entitled to it if you are hoping to benefit. Don't sell up in the expectation of 10% and be disappointed to find the tax is nearly twice as much. A striking feature of the tax system now is the big difference between income tax rates (personal allowance of £6,475, top rate 40% - going up to 50% in 2010/11) and CGT rates (annual exemption £10,100, top rate 18%). It doesn't take a genius to spot that you will keep more money if you can arrange to have your investment returns in the form of gains rather than income. HM Revenue & Customs are aware of this - there was a similar difference before 1988, and they will be dusting off old rules that let them charge people at income tax rates on what the taxpayers think are gains. If you are hoping to take advantage of the new lower CGT rate, it's worth being sure that none of these anti-avoidance provisions can be applied to you. Action Point! Do you know how much CGT you might pay on your assets?