Introduction to tax for family lawyers
Produced in partnership with David Salter, deputy High Court judge and Recorder
Introduction to tax for family lawyers

The following Family practice note Produced in partnership with David Salter, deputy High Court judge and Recorder provides comprehensive and up to date legal information covering:

  • Introduction to tax for family lawyers
  • Income tax
  • Capital gains tax
  • Inheritance tax
  • Stamp duty land tax (England and Northern Ireland)
  • Stamp duty
  • Council tax

This Practice Note summarises the main provisions for the taxation of income, capital gains, gifts and estates on death and stamp duty land tax, assuming an individual taxpayer who is UK-resident and domiciled. Tax law changes frequently: this guide is not and should not be relied on as a substitute for detailed professional advice, where it is necessary.

Income tax

Individuals pay income tax on their entire income with specific rules applying to different sources of income and expenditure that may be offset against such income.

The principal sources of income are:

  1. employment earnings or profits from a trade, profession or vocation (in respect of which national insurance contributions are also payable)

  2. rent from furnished or unfurnished property or land

  3. interest and dividends

  4. overseas income (on which foreign tax may already have been paid)

A personal allowance is deducted from an individual’s total income before tax is calculated, provided that their annual income (after deductions for pensions and gift aid donations) is less than £100,000. This is subject to tapered relief where income is up to £125,000 in 2019/20 and 2020/21, creating an effective marginal rate of tax of 60% (or 62% including employee’s NIC) between £100,000 and £125,000 (in 2019/20 and 2020/21). This gives tax-free income to everyone (subject to tapering) regardless of their age of £12,500 in 2019/20 and 2020/21. Individuals can transfer 10% of their

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