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bigduckontax
bigduckontax, Accountant
Category: Tax
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Hello, I need to submit a self assessment form by the end

Customer Question

Hello,
I need to submit a self assessment form by the end of the Jan 2015 for the tax year 2013-2014, This will be my second year of self assessment after I was identified by HMRC for bordering on the 100k threshold.
During 2013-2014 I received gifts from my parents separated (40k & 10k) to assist in a purchase of my first property...
Questions
Are these gifts considered to be tax free? I believe so
Do I need to declare them in my self assessment return?
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I'm Keith and happy to help you with your question; I bring news which I suspect will be to your liking.
Gifts are outside the scope of UK taxation and there is no requirement to declare them on your self assessment tax return. Any interest earned thereon must, of course, be declared. On any income over 100K your Personal Allowance is lost by one pound for every two quid over that limit.
Small tax tip; one of the best ways to top slice your income is to make contributions to a personal pension plan up to 100% of emoluments. The maximum, including any employer contribution, in 14/15 is 40K, 13/14 it was 50K and before that unlimited. If you have a SSIP you can, in certain cases, go back several years to mop up unused contribution levels.
I do hope I have brought some pre-Festive Season cheer to your table.
Customer: replied 2 years ago.
Keith,
Yes, your response is very much to my liking.
In addition you have piqued my interest re ways to top slice you income.
I actually don't have a pension, what does Ssip stand for?
So could I set up a private pension and contribute a few grand (eg 10k) and then claim that back from my previous years self assessment and reduce the amount I have to pay for 2013-2014?
I have little experience in tax and pensions so I'd appreciate a response I lehmans terms.
P.s you are on course for an excellent rating :)
Many thanks
Simon
Expert:  bigduckontax replied 2 years ago.
Self Invested Pension Plan; a general synopsis is given here:
http://en.wikipedia.org/wiki/Self-invested_personal_pension
You could invest 40K in the current tax year Simon and then by contributing more you could start to mop up unused allowances in earlier years. You would have to lay out quite a bit of readies though!
In my personal opinion a stakeholder's pension plan is the best option, but you need to go for one with minimal management charges. The media has been full of scandals recently about pension pots being gobbled up by sky high management charges. It may be adviseable to consult an Independent Financial Adviser. You need a licence to advise on this in any detail and I have never had any need to take out such a licence, I did everything through my very conservative insurance broker.
I do hope I have shed some light on the possibilities for you.
bigduckontax and other Tax Specialists are ready to help you
Customer: replied 2 years ago.
Thanks Keith
Expert:  bigduckontax replied 2 years ago.
Thank you for your support.