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Debt relief |
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Debt reliefAny arrangement intended to reduce the burden of debt on a country, usually including forgiveness of part or all of what is owed to creditors who may include private banks and other entities, government, or international financial institutions.Debt reliefReducing the principal and/or interest payments on Less developed country loans.Debt relief Similar MatchesTaper reliefTaper reliefTaper relief was introduced into the UK taxation regime with effect from 6th April 1998. Its purpose is similar to indexation, in that it aims to reduce the amount of capital gains tax you have to pay when you sell shares, to account for the effect of inflation.But there is a critical difference. Whereas indexation works by increasing the base cost of an asset, taper relief works by reducing the gain by a 5% a year for every year it was held regardless of the base cost. This is significant because if the base cost of an asset was zero, indexation does not help. Taper relief, on the other hand, does. To qualify for taper relief, your shares have to be held for a minimum of 3 years. If you sell within that period, no taper relief will be available.For each whole year that you have held shares from the date of acquisition to the date of disposal, you can reduce the gain by 5%. The maximum relief available is 40%, after 10 years.Assets held on or before 17 March 1998 qualify for an additional year of taper relief, and the 'three year' requirement does not apply.ExampleYou buy 1,000 shares in Multimower plc in February 1998 for £2,000You sell the shares in August 2000 for £5,000You pre-taper gain is £3,000. Taper relief is available for three years (15%) = £750Your reduced gain is £2,250Note that in the above example, taper relief was available even though the shares had not been held for three years, because they were owned on 17th March 1998.Taper relief applies to each individual share acquisition, so if you dispose of a holding built up over a number of years after 5 April 1998 then the gain on each acquisition has to be calculated individually and taper relief applied to each one individually. The good news is that a holding which you had at 5 April 1998 can be treated as one element, as shown above. Import reliefImport reliefUsually refers to some form of restraint of imports in a particular sector in order to assist domestic producers, and with the connotation that these producers have been suffering from the competition with imports. If done formally under existing statutes, it is administered protection, but it may also be done informally using a VER. Holdover reliefHoldover reliefThe practice of deferring capital gains tax liability on a gift by transferring the liability to the recipient. When the recipient eventually sells the gift, the full CGT bill will normally fall due then, and the recipient will have to pay it, not the donor.To put this in context, remember that normally when a person makes a gift of, say, shares to anyone other than his/her spouse, the gift is deemed to have been made at fair market value and will be liable to capital gains tax if a gain has been made. This can be unattractive to the donor because he/she will not actually have made a gain, and won't have received any money at all if the asset was given freely. Holdover relief puts the tax burden on the recipient rather than the donor, and postpones the time when it has to be paid. Life assurance premium reliefLife assurance premium reliefA tax relief of 15% on the premiums paid into long-term insurance policies. Applies only to policies lasting for more than 10 years and issued before March 13, 1984. Retirement reliefRetirement reliefA special relief for Capital Gains Tax purposes which applies when an individual aged 55 or over disposes of his business or an interest in a business. Further Suggestionsmortgage interest relief at sourcerollover relief tax relief double taxation relief business property relief agricultural property relief Tax relief |
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