My Tax Form Info

THE TOP 10 STUPID TAXES – I

Here are the top 10 stupid taxes… ever in the world.

1. Early 1000s: Heregeld

Lady Godiva’s legendary ride naked through Coventry was perhaps one of the most effective anti-tax demonstrations in history. Her tyrannical husband, Earl Leofric, had imposed an oppressive tax called the Heregeld to pay for the King’s bodyguard.

After pleading with him to repeal the tax, Leofric replied: “You will have to ride naked through Coventry before I will change my ways”. So Godiva took him at his word – after ordering the town to close all their windows and doors, she rode through the town with only her long golden hair as her cover. True to his word, Godiva’s husband repealed the hated tax.

2. 1773: Colonial taxes

The Boston Tea party was not a party, but a demonstration against the unfair taxation of colonies. The British Government gave the British East India Company, an English trade company, far more beneficial tax arrangements than its colonial competitors.

Demonstrators in Boston became particularly fed-up with this, and one night a group of protestors sneaked onboard a docked British East India Company ship and unloaded 45 tons of tea (worth an estimated £10,000 – that is about £953,000 today) into the sea. The event ultimately helped spark the American Revolution and the loss of America to the British Empire.

3. 1696: Window tax

Ever wondered why some old or listed buildings have their windows bricked up? When William III reigned, a new tax was imposed on houses with more than six windows to help pay for the wars in Ireland and on the continent. Homeowners with bricked up windows would have undoubtedly suffered dark rooms and poor ventilation but many considered that preferable to paying up. The tax was not repealed for 51 years. (…cont.)

INHERITANCE TAX: AN OVERVIEW-II

(…cont.)

How to do valuation of estate for Inheritance Tax?

There are three steps which should be followed while carrying out valuation. They are as follows:

1) Take the value of all of the assets that they own, together with the value of their share of any assets that they own jointly with someone else: for example a house that they own with their partner any assets which are held in a trust, from which they had the right to benefit any assets which they had given away, but in which they kept an interest: for instance, if someone gives a house to their children but still lives in it rent-free certain assets which they gave away within the last seven years

2) From the total above deduct everything that the deceased person owed, for example:

any outstanding mortgages or other loans unpaid bills funeral expenses. (If the debts exceed the value of the assets owned by the person who has died, the difference cannot be set against the value of trust property included in the estate.)

3) The value of all of the assets, less the deductible debts, is their estate. The threshold above which the value of estates is taxed at 40 per cent is £300,000 from April 2007. For the tax year 2008-2009 it rises to £312,000, in 2009-2010 to £325,000, and in 2010-2011 to £350,000.

Documentation for Inheritance Tax

Forms you need to fill:

1) If the estate is exempt from Inheritance Tax.

Country in which the deceased person lived	Required forms for excepted estates
England	Form IHT205 and form PA1 – application for probate
Scotland	Form C1 (‘Inventory’) and form C5 if they died on or after 6 April 2004; if they died before this date form C1 only
Northern Ireland	Form IH205 only

2) If the estate is likely to be subject to Inheritance Tax

In this case you complete form IHT200 plus any relevant supplementary forms (these are indicated on the IHT200).

You also complete:

Form D18 if the deceased person lived in England, Wales or Northern Ireland probate application form PA1 if the deceased lived in England or Wales Form C1 Inventory if the deceased lived in Scotland (In Northern Ireland you only complete a probate application form at interview.)

Deadline for paying Inheritance Tax

In most cases, Inheritance Tax must be paid within six months from the end of the month in which the death occurs, otherwise interest is charged on the amount owing. Tax on some assets, including land and buildings, can be deferred and paid in installments over 10 years.

INHERITANCE TAX: AN OVERVIEW-I

Quick stats

£3.8bn Amount raised from UK inheritance tax in 2007 (source: HMRC)

£1.9bn Unnecessary amount of inheritance tax paid each year by UK taxpayers because of poor planning, according to research conducted by Unbiased.

44,000 Number of estates that actually paid inheritance tax in 2007-08, according to HMRC.

What is inheritance tax?

Inheritance Tax is the tax that is paid on your ‘estate’.

Broadly speaking this is everything you own at the time of your death, less what you owe. It’s also sometimes payable on assets you may have given away during your lifetime. Assets include things like property, possessions, money and investments.

Who pays Inheritance Tax?

Not everyone pays Inheritance Tax on death. It only applies if the taxable value of your estate (including your share of any jointly owned assets and assets held in some types of trusts) when you die is above £312,000 (2008-2009 tax year). It is only payable on the excess above this nil rate band.

Inheritance Tax nil rate band and rates

Inheritance Tax is charged at the following rate on death:

Inheritance Tax	2008-2009 tax year
Taxable value of your estate above which it is charged	£312,000
Rate at which it is charged	40%

Exemptions

The taxman lets you give away a certain amount each year without it attracting inheritance tax, even if you die within seven years. The amounts have remained the same for donkeys’ years, but are still useful.

There are also a number of exemptions which allow you to pass on amounts (during your lifetime or in your will) without any Inheritance Tax being due, for example: if your estate passes to your husband, wife or civil partner and you are both domiciled in the UK there is no Inheritance Tax to pay even if it’s above the £312,000 nil rate band.

Most gifts made more than seven years before your death are exempt. You can give away £3,000 in each tax year (and carry over any unused allowance to the next year, but for one year only). You can make small gifts worth up to £250 each to as many individuals as you want in each tax year. And you can also make gifts out of regular income tax-free, so long as your lifestyle isn’t affected. Such gifts include birthday and Christmas presents, although some grandparents choose to pay grandchildren’s school fees under this exemption. Make sure there is clear, written documentation to prove the payments were regular.

The taxman also likes a wedding (including those involving a civil partnership), and allows you to give away cash gifts when a couple – your children and their partners, for example – ties the knot. Gifts to your husband, wife or civil partner are tax-free – this counts even if you are separated, but not divorced, and as long as you both live in the UK. Each parent can give a child up to £5,000; grandparents and other relatives can give up to £2,500; and anyone else can give up to £1,000. (…cont.)

INDIA STILL HOT FOR FDI

The US financial crisis has not been able to affect the FDI inflows in India. As per the World Economic Report prepared by United National Conference on Trade & Development (UNCTAD) the problems related to sup- prime crisis and fall out of major financial institutions like Freddie Mac and Fannie Mae, Lehman Brothers, AIG (American Insurance Group) and many more have disrupted financial markets in US and some European countries. This has created a liquidity crunch in the markets. The report also states that the economic recession in US & European countries will not affect developing countries like India, China, Brazil etc which are growing at a faster rate. The report also stated that India will find it difficult to fund the $ 495 billion infrastructure program spread over five years till 2012. According to World Bank estimates, $ 500 billion are required over a period of 2001-2010.

MOST ATTRACTIVE COUNTRIES FOR FDI (2008- 10)
1 CHINA	7 GERMANY
2 INDIA	8 INDONESIA
3 UNITED STATES	9 AUSTRILA
4 RUSSIA	10 CANADA
5 BRAZIL	11 MEXCIO
6 VIETNAM	12 UNITED KINGDOM