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Why Financial and Legal?
What makes Financial and Legal Limited stand out from other professional services?
At Financial and Legal Limited, we prioritize building strong and lasting relationships with our clients. We take the time to truly understand their needs and goals, and work collaboratively to achieve them.
What types of services does Financial and Legal Limited offer?
Financial and Legal Limited take the fear out of forms. We offers a complete range of services relating to the back office administration for legal and accountancy. These include but are not limited, no fault divorce, small claims, wills and probate, self- assessment, Limited Company accounts. The list is endless. Please reach us at steven.oxley@financial-legal.com if you cannot find an answer to your question below or you want to know if we can help you.
Frequently Asked Questions
Please reach us at steven.oxley@financial-legal.com if you cannot find an answer to your question.
Self-assessment in the UK is a way of reporting your income and paying tax to HM Revenue and Customs (HMRC). Here’s how it works:
Who Needs to File? You’ll likely need to file a tax return if you:
- Are self-employed with income over £1,000.
- Are a company director.
- Earned £100,000 or more.
- Had savings or investment income exceeding £10,000 before tax.
- Received income from abroad.
- Earned over £50,000 and claim child benefit.
- Received £2,500 or more in untaxed income (e.g., rental income).
Submission Methods:
- Online: Submit your tax return online.
- By Post: Complete and mail the forms received from HMRC.
Tax Year Deadlines:
- Registering for self-assessment (first time): October 5.
- Paper tax returns: Midnight, October 31.
- Online tax returns: Midnight, January 31.
- Pay your tax bill: Midnight, January 31,.
- If you make advance payments (‘payments on account’), there’s a second deadline on July 31.
Penalties for Late Filing:
- Late submission: £100 penalty.
- Over three months late: Additional £10 per day (up to £900).
- There are others like enforcement orders for non-payment.
UK Government Gateway:
- The Government Gateway is an IT system developed to allow applicants to register for various online services provided by the UK Government.
- It replaced the old system of paper submissions.
- It can be used for other official documentation like driving licenses.
Unique Taxpayer Reference (UTR):
- Your UTR is a 10-digit number assigned by HM Revenue and Customs (HMRC).
- It uniquely identifies you for tax purposes in the UK.
- You receive a UTR when you:
a): Register for Self Assessment (for individuals or businesses).
b): Set up a limited company.
- You’ll usually get your UTR by post within 15 days after registration.
- You can also find it in your Personal Tax Account, the HMRC app, or on previous tax returns and other HMRC documents.
- Contact HMRC if you cannot find your UTR
a limited company is a form of business that is legally separate from its owners (typically shareholders) and those appointed to run it (directors). Here are the key points:
- Limited Liability: The defining characteristic of a limited company is limited liability. This means that the company’s owners (shareholders) are not personally liable for the company’s debts or legal obligations beyond their investment in the company.
- Incorporation: All limited companies in the UK must be incorporated at Companies House and given a unique company registration number. The company name must end with either “Ltd.” or “Limited.”
- Legal Personality: Once incorporated, the company gains a separate legal personality from the individuals who operate it.
Your Will lets you decide what happens to your money, property, and possessions after your death. This is called your Estate.
If you make a will, you can also make sure you do not pay more Inheritance Tax than you need to.
If you pass away without a valid will (i.e., you die 'intestate'), the law will decide who gets what of your estate. This is not ideal, as it means that family members may not be adequately provided for. If a couple, married or otherwise, want to make almost identical wills, then they may wish to draw up mirror wills to reflect their wishes. These are identical in every way, except for the name of the testator (i.e., the person making the will) and their individual funeral wishes.
The Estate
An Estate is the total of following assets:
- Money
- Savings and investments
- Property (defined as bricks and mortar!)
- Possessions
Inheritance tax (IHT) is deducted from this total, as well as any debts or funeral expenses.
What is IHT?
Inheritance tax is any money owed to the taxman (HMRC) on the estate upon Death. How much is due depends upon what the estate is worth:
- IHT is calculated on the value of the estate above the current IHT threshold of £325,000.
- Anything left to a spouse, civil partner, a charity, or a community amateur sports club is IHT-free.
- This threshold rises to £500,000 if a home is given to children or grandchildren, by using the £175,000 main residence nil-rate band. This is usually calculated after death.
- For married couples or those in a civil partnership, any unused allowance can be added to the partners, so their limit can be up to £1 million
- Anything above the IHT threshold attracts an IHT liability of 40%
The Seven Year Rule
A popular way to reduce an IHT burden is to start giving away parts of a person’s Estate before they die and seven is the magic number. Gifts will not be liable for IHT if the gift is made seven years before death otherwise, it will be added to the Estate on a sliding scale.
Disposal of Assets to avoid IHT:
· Disposal of assets to avoid IHT is not limited to the gift of property
· A person can make regular gifts with no monetary limit, exempt from IHT, if they can afford them, they are regular, and they are made from surplus income and not capital. Grandchildren’s school fees for example if structured correctly can be exempt.
· Everyone is allowed by HMRC to gift £3,000 (tax-free) each tax year, this is known as an “annual exemption.”
· A life insurance written in trust could avoid/minimise inheritance tax (see below for the Law Society’s definition of a trust).
· Disposal of property to a child is one of the gifts that can be made but it must sit entirely outside the person’s Estate on death therefore the person making the gift has to pay to the child rent at market value.
Law Society Definition of a Trust
· "A trust is a legal arrangement for managing assets. There are different types of trusts, and they are taxed differently. In a trust, assets are held and managed by one person or people (the trustee) to benefit another person or people (the beneficiary). The person providing the assets is called the settlor.”
- No-fault divorce in the UK allows married couples to divorce (and civil partners to seek a dissolution) without one party having to apportion blame on the other. Instead, couples can make a joint decision to divorce, removing the need for fault-based grounds like adultery or unreasonable behavior. Here are the key characteristics:
- Removal of Blame: Couples can now divorce without assigning fault to either spouse.
- Joint Application: Couples can apply for a joint divorce.
- Conditional Order: There’s a minimum of 20 weeks between application and the conditional order.
- No Contesting: Contesting a divorce is no longer possible
- Remember, these changes also apply to the dissolution of civil partnerships
A power of attorney is a legal arrangement that allows someone (the donor) to appoint one or more individuals (known as attorneys) to make decisions on their behalf. Here are the key points:
Types of Power of Attorney:
- Health and Welfare LPA: This type grants an attorney the power to make decisions related to your daily routine, medical care, moving into a care home, and life-sustaining treatment. It’s used when you’re unable to make your own decisions.
- Property and Financial Affairs LPA: With this LPA, an attorney can make decisions about your money and property, such as managing bank accounts, paying bills, collecting benefits, or selling your home. Once registered and not before it can be used with your permission.
Process to Create an LPA:
- Choose Your Attorney: You can appoint more than one attorney.
- Complete Forms: Fill in the necessary forms to appoint them.
- Register with the Office of the Public Guardian: Registration can take up to 20 weeks and costs £82 (unless you qualify for a reduction or exemption). Office of the Public Guardian - GOV.UK (www.gov.uk)
- You can cancel it at any time.
Remember, acting as someone’s attorney doesn’t require legal experience.
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