1. www.pkf.co.uk © PKF (UK) LLP Ways for GPs to save tax Andrew Tiplady 26 March 2009

2. www.pkf.co.uk © PKF (UK) LLP Type the proposal name here Session Content Income Tax –Business Personal expenses Capital allowances –Personal Capital Gains Tax Inheritance Tax

3. www.pkf.co.uk © PKF (UK) LLP Type the proposal name here Income Tax – Business Maximising personal expenses claims –Subscriptions –Sundry equipment –Books / journals –Postage / stationery –Clothingetc…… Timing of expenses –Buying equipment/new car

4. www.pkf.co.uk © PKF (UK) LLP Type the proposal name here Income Tax – Business Motor expenses –Mileage log for business mileage –2 nd car Business use of home –Area of home for business use –Percentage of household bills –Beware Capital Gains Tax Mobile / Home Telephone / Broadband –Log of business calls –Line rental – 2 nd line for business –Is business main purpose for broadband?

5. www.pkf.co.uk © PKF (UK) LLP Type the proposal name here Income Tax – Business Courses - UK / Overseas –GP’s particular role –Adequate professional content –Dual purpose – overseas Locum Insurance –Limited to meeting cost of locum cover –Not income protection insurance Spouse’s Wages –Job description –Commercial rate –PAYE / Second job - tax return

6. www.pkf.co.uk © PKF (UK) LLP Type the proposal name here Income Tax – Business Buying equipment / fixtures and fittings / fitting out a new building –Claim maximum capital allowances claimed –To be considered at the planning stage –Require a full breakdown of spend –Architect or Quantity Surveyor

7. www.pkf.co.uk © PKF (UK) LLP Type the proposal name here Income Tax – Business Capital allowances from 6 April 2008: –Plant and Machinery - 20% WDA –“Integral Feature” of a building - 10% WDA Electrical system Heating system / air conditioning Lifts / escalators –Annual Investment Allowance - £50,000 Not cars –Energy and water-efficient - 100% Authorised list

8. www.pkf.co.uk © PKF (UK) LLP Type the proposal name here Income Tax – Business Accounting year end choice / change –Tax acceleration v pension dynamisation –Use of overlap relief Timing of superannuation contributions –Tax relief when paid –Cash flow Note: Estimates of NHS Pensionable Profits/Pay – 2009/10 – to be submitted by 1 April 2009

9. www.pkf.co.uk © PKF (UK) LLP Type the proposal name here Income Tax - Personal Married couples –Use of personal allowance –Use of lower tax bands Transferring income generating capital to spouse (outright & unconditional) Spouse’s salary (commercial) –PAYE implications

10. www.pkf.co.uk © PKF (UK) LLP Type the proposal name here Income Tax - Personal Personal pension planning –20% tax relief given at source –Additional 20% tax relief to be claimed via tax return Giving to charity –Higher rate tax relief –Carry back Tax efficient borrowing (Capital recycling) –Replace loans not qualifying for tax relief –Correct sequence of events – need advice –Early redemption penalties / interest rates Use of ‘Offset accounts’ –Save 40% tax on interest received

11. www.pkf.co.uk © PKF (UK) LLP Type the proposal name here Income Tax - Personal Venture Capital Trusts (“VCT”) –Maximum annual investment - £200,000 –30% income tax relief –Tax free income and gains Shares must be held for 5 years Enterprise Investment schemes (“EIS”) –Maximum annual investment - £500,000 –20% income tax relief (as a deduction of income tax) –Tax free income and gains Shares must be held for 3 years –Eligible losses - offset against income tax and CGT –CGT deferral

12. www.pkf.co.uk © PKF (UK) LLP Type the proposal name here Capital Gains Tax Capital Gains Tax (“CGT”) –Annual exemption - £9,600 CGT reliefs –Entrepreneurs’ relief (“ER”) from 6 April 2008 Taper relief abolished 5 April 2008 ER – 10% effective rate of CGT up to £1m –Lifetime limit of £1m for “business gains” –ER rules less flexible than taper relief –Rollover relief –EIS CGT deferral –Principal Private Residence relief (“PPR”) 2 properties – election needed Letting relief

13. www.pkf.co.uk © PKF (UK) LLP Type the proposal name here Capital Gains Tax Property Ownership – on or off balance sheet? If held on partnership balance sheet –If a partner sells the property or an asset used in the business – ER may not be available Disposal must coincide with the cessation of trade Partner selling property interest at the same time as retirement will get ER –Partnership agreement »Contract for sale on retirement Beware - If property owned personally off partnership balance sheet –Payment of rent denies ER

14. www.pkf.co.uk © PKF (UK) LLP Type the proposal name here Inheritance Tax Annual exemption - £3,000 –Previous year’s annual exemption Small gifts exemption - £250 Gifts for marriage - £1,000 to £5,000 Gifting ‘Out of Income’ –No reduction in capital –Pattern / habitual Nil rate band - £312,000 (2008/09) IHT after reliefs and Taper Relief – 40%

15. www.pkf.co.uk © PKF (UK) LLP Type the proposal name here Inheritance Tax Inheritance tax planning –Have you got a Will? –Use exemptions –Remember interaction with CGT –Use reliefs Business Property Relief (“BPR”)

16. www.pkf.co.uk © PKF (UK) LLP Type the proposal name here Inheritance Tax Property Ownership – on or off balance sheet? Business Property Relief (“BPR”) –100% if a partnership asset –50% if asset owned personally by a partner but used by the partnership Need to consider partnership agreement –Contract for sale - denies BPR Put and call options

17. www.pkf.co.uk © PKF (UK) LLP Type the proposal name here Questions?