Archived News December, 2011

Tax expert Carmarthenshire Journal 21st December 2011

My husband died recently and our wills state that on the first death their estate is to pass onto the spouse. However, I want to give my children a property and a small amount of cash from his estate. What is the best way to do this?

There are two ways in which this could be achieved. Firstly a solicitor could prepare ‘deed of variation’ which effectively amends your late husband’s will and leaves the property and the cash to your children. However, this may have inheritance tax consequences when you pass away. Alternatively, you could give the property and cash to them yourself. Assuming that the property value has not risen significantly since your husband’s death there should not be any immediate tax implications. This then becomes a ‘potential exempt transfer’ for inheritance tax purposes, which basically means that the transfers may be taken into account if you were to die within 7 years. Either way it is advisable to seek further advice.

We are selling part of our business relating to a commercial site we own. We have been asked by our solicitor whether VAT should be charged on the sale and given that we charge our tenants VAT on the rent, we assume that the sale should be VATable. Is this correct?

In general, you are right in thinking that VAT should be charged on the sale, given that you charge VAT on the rents. However, if you selling a distinct part of your business (which you seem to be) and certain conditions are met then there is a possibility that the sale will be a ‘Transfer of Going Concern’ and therefore no VAT should be charged.

With the recession hitting our business, we are looking at ways to improve our customer relations and manage our marketing strategy better. As it is Christmas time, we were thinking about visiting some of our customers and taking with us a present of some sorts as a thank you. Is this ok to do?

Whilst corporate hospitality is a fundamental part of most businesses, there is no tax relief on gifts to clients or customers. However, businesses will receive tax relief on branded products or samples associated with their business with the exception of food, drink and tobacco. If the products don't have a company brand or logo and are not valued at more than £50 plus VAT, then they will be allowable as well.

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