Can you explain the different types of tax?

Here is a brief overview of Income, capital gains and inheritance tax.

Income Tax

Income tax is levied on income that is usually generated by individuals. This might typically include earnings from employment, self employment, dividends or rental income. Tax on income generated by a company is referred to as corporation tax.

Capital Gains Tax

Capital gains tax is applicable when you by an asset and sell it for a profit. In the UK, each person has an allowance they can use to reduce any possible capital gains tax CGT. Not all assets are subject to CGT. For instance your principle or main residence is not usually subject to CGT. If you would like to find out further information on exemptions please contact us.

Inheritance Tax

Inheritance tax is also commonly named estate tax or death duties. This tax might arise on the death of an individual. In the UK each person has an allowance called the nil rate band. If your estate valued in excess of the nil rate band then inheritance tax would be due on the difference. For more information please see our section on inheritance tax planning.

There are some aspects of tax planning advice that are not regulated by the Financial Services Authority. Our advisers can explain the types of tax  to you. If you would like more information please contact us.