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

A place in the country The property market has been the source of big profits in recent years. Even if values have fallen recently, many people will own houses that are worth much more than they cost. Gains on your "only or main residence" are not taxable (unless you use part of it exclusively for a business purpose), but a second home or an investment property will be chargeable to CGT at 18%. If you use more than one property as a residence - that is, you yourself live in them both - you can choose which one you want to be exempt from CGT. Although this might be the one that you live in most of the time, you are likely to obtain an advantage - and give yourself greater flexibility in the future - if you make an "election" within two years of acquiring the second home. For example, if you decide to sell the "second home" first, or if the gain on it is larger than the gain on your main home, it might be useful for it to be exempt. This has had a bad press lately because some MPs were using the rule for houses which taxpayers were already buying for them - and they weren't living there at all. But it can be a perfectly respectable plan. You can only elect for a "residence" to be exempt, not an investment property that is let out to others. So a "buy-to-let" property is chargeable to CGT. But if you are letting out a property that you have lived in, or you move to live in a property that you have let out, you can enjoy significant extra reliefs. Action Point! Do you have a second home? Do you want to "move-to-let"?