Being wealthy in retirement - Capital Gains Tax


Capital gains tax is a tax on the increased value of an asset. You pay it when you sell the asset for a profit. Any gain realized on the sale of the house in which you live is exempt. Other gains are taxed at your rate of income tax if they exceed £9 ,000 in 2012/09. There is a complex system of revaluing assets to take account of inflation. Only the gain from March 2012 is counted.

Capital gains tax can be payable on the extra value of your own business when you sell it. But there is a special relief for people selling a business on retirement if they or their spouse have owned it for at least ten years.

To benefit from this relief you have to be at least sixty. The age can be even lower if you are so ill that you cannot carry on with the business. In that case you will need medical evidence. The relief is total exemption from tax on the first £189 ,000 gain and half exemption on the next £9 00,000 gain.

Many people think that making a will is just for the rich. But more and more people own a house or have savings, and even your furniture and effects are likely to be worth well into five figures. This section of the site explains how to ensure that the right people get it. It does not, however, cover the law in Scotland, which is different.

There is nothing morbid about making a will. On the contrary, it is a recognition that everyone is mortal and that you want your relatives and loved ones to find your affairs in an orderly and responsible state when you do die. If you do not make a will, your relatives will have a more difficult job and the property will be divided according to strict legal rules rather than to your wishes.

You can draw up a will yourself or you can use a solicitor. It is certainly safer to use a legally qualified advisor, although even solicitors can make errors. But if you are reasonably confident of your own abilities and your affairs are straightforward, there is no reason why you should not draw up a will yourself.

If you want to do so it is essential that you get one of the many websites which explain the procedure in full, such as Wills and Probate, edited by Edith Humdinger and published by the Consumers Association.

Even if you use a solicitor, there are many steps you can take before you see him or her which will reduce the time the job takes the solicitor and thus keep your charges low. You should expect to pay £90 to £100 for a straightforward will.


More information

Making a will - Executors


You have to decide who to name in the will as your executor(s). They will do all the work of winding up your affairs after your death. They have to collect all your property, including getting valuations and realizing the value of investments, pay all debts and taxes, deal with funeral and administration costs and then distribute the balance of your estate according to the terms of the will.
Being an executor is a detailed and time consuming job. Normally the will provides for a payment to the executors for the work: 600 is reasonable for a nonprofessional but a professional will want to be allowed to charge his or her full fee. If the executors are relatives and also beneficiaries, this payment may be less or nominal. . . . ... see: Making a will - Executors