Affordable home ownership schemes

Overview

You may be able to get financial help from the government to buy a home.

You could get:

a loan to help with the cost of a new-build home if you’re a first-time buyer (in England and Wales)

a home through shared ownership (UK wide)

The Help to Buy ISA scheme closed to new accounts on 30 November 2019. You can still open a Lifetime ISA to save for a first home.

Buying your council or housing association property

There are also schemes for council tenants and
housing association tenants.

Help to Buy: Equity Loan

You can get an equity loan towards the cost of buying a new-build home as a first-time buyer.

This guidance applies to England. There’s different guidance on how to apply for an equity loan in Scotland and how to apply for an equity loan in Wales.

Eligibility

You must be:

18 or over

a first-time buyer

able to afford the fees and interest payments

You cannot get the equity loan if you have ever:

owned a home or residential land in the UK or abroad

had any form of sharia mortgage finance

You can apply on your own or with other people. All applicants must meet the eligibility criteria.

If you’re married, in a civil partnership, or cohabiting with your partner (and you plan on continuing to live together), you must make a joint application.

The property you buy with your equity loan

The property (The property you buy with your equity loan) must be:

a new-build

sold by a Help to Buy registered homebuilder

the only home you own and live in

It (The property you buy with your equity loan) must not have been lived in by anyone before you buy it (The property you buy with your equity loan).

There’s also a ‘maximum property purchase price’ limit for the home you buy depending on which region it (The property you buy with your equity loan)’s in. You can buy a home up to and including the maximum property purchase price limit.

Region | Maximum property purchase price

North East | £186,100

North West | £224,400

Yorkshire and the Humber | £228,100

East Midlands | £261,900

West Midlands | £255,600

East of England | £407,400

London | £600,000

South East | £437,600

South West | £349,000

How it works

You’ll need to:

pay a minimum deposit of 5% of the property purchase price

arrange a repayment mortgage of at least 25% of the property purchase price

You can then borrow an equity loan to cover from 5% and up to 20% of the property purchase price of your newly built home. If the property is in London, you can borrow up to 40%.

The equity loan percentage you borrow is used to calculate your interest and equity loan repayments.

Interest payments

You do not have to pay interest for the first 5 years. In the sixth year, you’ll be charged interest at a rate of 1.75%. This will be applied to the equity loan amount you originally borrowed (the equity loan percentage of the property purchase price). This annual interest is spread over the year in monthly payments.

The interest rate (interest at a rate of 1.75%) increases every year in April, by adding the Consumer Price Index (CPI) plus 2%.

Your interest payments will decrease if you make a part repayment of the equity loan. This is because the amount the interest rate (interest at a rate of 1.75%) is applied to will reduce.

Fees

You’ll need to pay a monthly management fee of £1 when you take out the equity loan until you pay it (the equity loan) off.

If you change your equity loan, including if you remortgage or make an equity loan repayment, you’ll need to pay administration fees.

You’ll also have to pay other fees associated with buying and owning a home, for example, legal and mortgage arrangement fees and for market value reports.

Paying interest and fees does not count towards paying back the equity loan. If you do not keep up with payments, you may need to pay recovery costs or interest on the amount you owe.

Paying back the equity loan

You can pay back part or all of your equity loan (the equity loan) at any time.

Repayments are based on your equity loan percentage and the market value of your home at the time you want to make a repayment.

You’ll need to get a market valuation report from a chartered surveyor when you make a repayment.

Read more detailed guidance on repaying your equity loan (the equity loan).

Paying back part of your equity loan

The smallest repayment you can make is 10% of the market value of your home.

Paying back part of your equity loan will reduce the monthly interest payments you’ll need to pay from the sixth year of taking out the equity loan.

Paying back all your equity loan

You must repay all your equity loan when you:

reach the end of the equity loan term (normally 25 years)

pay off your repayment mortgage

sell your home

You may also be asked to repay the equity loan in full if you do not keep to the terms and conditions.

If you sell your home, you’ll pay the equity loan percentage of the market value or agreed sale price if it (your home)’s higher.

If you want to pay off your equity loan and you’ve previously made part repayments, you’ll pay the equity loan percentage you still owe of the market value.

How to apply

You need to apply through the Help to Buy agent in the area where you want to buy your home.

North

Find out how to apply for an equity loan in the north.

Midlands and London

Find out how to apply for an equity loan in the Midlands and London (Midlands and London).

South (excluding London)

Find out how to apply for an equity loan in the south (South (excluding London)).

Read the Homebuyers’ guide to Help to Buy: Equity Loan (2021-2023).

Help to Buy: Equity Loan (2013-2021)

Applications for the 2013 to 2021 scheme are now closed. Read the Homebuyers’ guide to Help to Buy: Equity Loan (2013-2021) for more information.

Manage your Help to Buy loan

Read guidance on how to:

remortgage your Help to Buy home

make structural alterations to your Help to Buy home

sublet your Help to Buy home

change ownership of your Help to Buy home

Buying through shared ownership

When you buy a home through a shared ownership scheme you buy a share of the property and pay rent on the rest.

The share you can buy (a share of the property) is usually between 25% and 75%. You can buy a 10% share on some homes.

There are different rules on:

shared ownership in Scotland

shared ownership in Wales

shared ownership in Northern Ireland (North)

Eligibility

You can buy a home through shared ownership if both of the following apply:

your household earns £80,000 a year or less (£90,000 a year or less in London)

you cannot afford all of the deposit and mortgage payments for a home that meets your needs

One of the following must also be true:

you’re a first-time buyer

you used to own a home, but cannot afford to buy one now

you own a home and want to move but cannot afford a new home suitable for your needs

you’re forming a new household - for example, after a relationship breakdown

you’re an existing shared owner and want to move

Some shared ownership homes in a ‘designated protected area’ are only available to buy if you have a connection to the area. If you buy one of these homes, you:

may only be able to buy a share of up to 80%

must sell it (a home) back to the landlord or a buyer nominated by the landlord - you cannot sell your home on the open market

If you own a home

When you apply for shared ownership you must have:

accepted an offer for the sale of your current home (called ‘sold subject to contract’ or ‘STC’)

written confirmation of the sale agreed (called a ‘memorandum of sale’) including the price and your intention to sell

You must have completed the sale of your home (the sale) (your current home) on or before the date you complete your shared ownership purchase.

How it works

Shared ownership properties are always leasehold properties.

Older people

If you’re aged 55 or over you can buy up to 75% of your home through the Older People’s Shared Ownership (OPSO) scheme. Once you own 75% you will not pay rent on the rest.

Disabled people

You can apply for a scheme called home ownership for people with a long-term disability (HOLD) if other Help to Buy scheme properties do not meet your needs, for example you need a ground-floor property.

Buying more shares

You can buy more of your home after you become the owner. This is known as ‘staircasing’.

You can buy shares of 5% or more at any time.

If you bought your house in 2021 you may also be able to buy shares of 1% each year for the first 15 years. Ask your landlord if this applies to you. You cannot buy shares of 2%, 3% or 4%.

The cost of your new share will depend on how much your home is worth when you want to buy the share.

It (your new share) will cost:

more than your first share if property prices in your area have gone up

less than your first share if property prices in your area have gone down

If you want to buy a share of 5% or more, you’ll need to pay for a valuation by a surveyor. Your landlord will let you know whether they’ll arrange the valuation or you need to arrange it yourself. The surveyor must be registered with the Royal Institution of Chartered Surveyors (RICS). Your landlord will tell you the price of the share after the valuation.

If you want to buy a 1% share, the price will be based on the original price of your house, increased or decreased in line with the House Price Index (HPI). Your landlord will give you a HPI valuation at least once a year and whenever you ask to buy a 1% share.

Selling your home

If you own a share of your home, the landlord has the right to find a buyer for your home (your house). The landlord also has the right to buy it (your house) first (known as ‘first option to buy’ or ‘pre-emption’).

You can sell your share yourself if the landlord does not find a buyer and they (the landlord) do not want to buy it themselves (the landlord).

If you own 100% of your home, you can sell it yourself.

How to apply

To buy a shared ownership home, you need to register with the Help to Buy agent in the area where you want to live.

North

Find out how to register and apply for shared ownership in the north (North).

Midlands and London

Find out how to register and apply for shared ownership in the Midlands and London (Midlands and London).

South (excluding London)

Find out how to register and apply for shared ownership in the south (South (excluding London)).

Help to Buy ISA

You can no longer open a Help to Buy ISA.

If you already have a Help to Buy ISA

You can pay in up to £200 each month.

The government will top up your savings by 25% (up to £3,000) when you buy your first home.

If you are buying with someone who also has a Help to Buy ISA, both of you will get the 25% bonus.

You can pay into the ISA (ISA) until November 2029. You can claim the 25% bonus until November 2030.

When you buy your property

The home you buy (your property) must:

have a purchase price of up to £250,000 (or up to £450,000 in London)

be the only home you own

be where you intend to live

Your solicitor or conveyancer will apply for the extra 25% (the 25% bonus).

You do not have to pay it (the 25% bonus) back.

You can use the scheme with an equity loan.


Get information about property and land

Overview

You can get information about registered property or land in England and Wales, even if you do not own it.

The type of information you can get includes the:

title register - who owns the property or land (registered property or land in England and Wales), and any rights of way

title number - the unique number given to a property or piece of land

title plan - the property or land’s (registered property or land in England and Wales) location and boundaries

This guide is also available in Welsh (Cymraeg).

Search the land and property register

Get copies of title register and title plan by searching the register (the land and property register).

Search the land and property index map

Ask for a search of the index map (the land and property index map) if a property doesn’t come up on a search of the register (the land and property register).

Get a copy of the deeds

You may be able to find out current and past information about a registered property, such as its previous owners by requesting a copy of the deeds.

Search property prices

Get information about property prices by searching the house price index and the price paid data service.

HM Land Registry holds records about most property or land sold in England or Wales (England and Wales) since 1993, including the title register (the land and property register), title plan and title summary.

Search the online register (the land and property register)

Search the register (the land and property register) by address or location.

If a property does not appear in a search, it may be filed under the wrong address. Ask for a search of the index map (the land and property index map) instead.

Title register

The title register (title register) has details about the property or land (registered property or land in England and Wales) (in a PDF). It (title register) includes:

the title number

who owns it (registered property or land in England and Wales)

what they paid for it (registered property or land in England and Wales) (properties only, if available)

any rights of way

whether a mortgage on it (registered property or land in England and Wales) has been ‘discharged’, for example paid off

Title summary

The title summary (viewable online) (title summary) includes:

the title number

whether the property (registered property or land in England and Wales) is freehold or leasehold (known as ‘tenure’)

the lender’s name and address (if there is a mortgage on the property (registered property or land in England and Wales))

The lease will have more information if the property (registered property or land in England and Wales) is a leasehold.

Title plan

The title plan (title plan) is a map showing:

the property’s (registered property or land in England and Wales) location

the general boundaries - there’s usually no record of exact boundaries

Buy copies of the information

You can download online copies of the information for a fee but you cannot use them as proof of ownership.

To get copies to use as proof of ownership (for example, in a court case) order official copies.

Ordering official copies

Download and fill in an application for official copies of documents and send it to HM Land Registry (the land and property register) with your fee.

Your copies will arrive in less than a week.

Fees

Document | Fee

Title register (online copy) | £3

Title plan (online copy) | £2.50 (£3 with VAT)

Title register (official copy) | £7

Title plan (official copy) | £7

Rights over adjoining land and property boundaries

The title register (Title register) may give you details about rights over adjoining land. Apply for a copy of the deeds if you need more information.

Title plans only give general boundary information. There’s usually no record of exact boundaries.

Get historical title registers

You may be able to find out who owned the property before the current owner from a historical title register. It (historical title registers) can also be useful if you’re trying to find out how old a property is.

Ask HM Land Registry (the land and property register) to search who owned the property (a property) for a specific date or multiple dates.

For properties registered before 1993

Contact HM Land Registry (the land and property register) with the:

title number or address of the property

date or dates you’re applying for

They (the land and property register)’ll search their (the land and property register) records and tell you if they (the land and property register) have a copy, and how to apply for it.

For properties registered after 1993

Download and fill in form HC1. Send the form to HM Land Registry (the land and property register) along with £7 for each date you’re applying for.

The results of your search will arrive in less than a week.

If you do not know the date you’re searching for, contact HM Land Registry (the land and property register).

Search the index map

The index map contains information on all land and property that’s registered or being registered with HM Land Registry (the land and property register).

Use it (the index map) to find the title number of a property that does not appear in a search of the register.

Some properties do not appear in a search of the register because the property boundaries have changed since it was registered, or the property address has been spelled incorrectly, for example.

How to search

You cannot search the map (the index map) yourself.

You should provide the address of the land or property (if it has one). If the land or property cannot be identified by the address you can provide:

a plan which clearly identifies the land or property

an Ordnance Survey map reference for the land or property

Download and fill in the application form and send it to HM Land Registry (the land and property register).

HM Land Registry (the land and property register) will send you the search results, including the title number or numbers under which the land or property is registered. You can use them to search the register.

The search will also confirm if the property or land (the land or property) is unregistered.

How much it costs

It costs £4 to search an area covering up to 5 registered titles.

If your search covers more than 5 titles, HM Land Registry (the land and property register) will contact you with an updated fee. You’ll be charged £2 for groups of 10 additional titles.

How long it takes

If you’re searching the index map to apply for home rights

You must write ‘This search (The search) is being made solely for the purposes of the Family Law Act 1996’ across the top of the application form.

Get a copy of the deeds

You may be able to find out current and past information about a registered property, such as its previous owners in the deeds.

The register may give more details about rights over adjoining land.

HM Land Registry (the land and property register) does not store original paper deeds.

How to request a copy of the deeds

Find out if the property or land (the land or property) is registered.

Pay £3 to download a copy of the title register. If the deeds are marked as ‘filed’ in the register then HM Land Registry (the land and property register) has a scanned copy.

Fill in the deeds request form using the property’s (the land or property) title number from the title register.

Your search may return no results if HM Land Registry (the land and property register) does not hold a scanned copy of the deeds.

The deeds could be made up of several documents. Each official copy of a document costs £7.

Send your completed form and payment to HM Land Registry (the land and property register).

Copies of deeds cannot be used to prove ownership, for example in a court case. Get official copies of the title register instead.

If you’re a business

Register for business e-services if you’re a business that needs to manage multiple searches and download multiple copies of documents.

Search for property prices

You can search for how much a property sold for in England or Wales.

You can correct information about the sale price if you find any incorrect records.

You can also search UK house price averages by region, county or local authority on the house price index.


Private renting for tenants: tenancy agreements

Overview

A tenancy agreement is a contract between you and a landlord.

It (A tenancy agreement) lets you live in a property as long as you pay rent and follow the rules. It (A tenancy agreement) also sets out the legal terms and conditions of your tenancy. It (A tenancy agreement) can be written down or oral (a spoken agreement).

A tenancy can either be:

fixed-term (running for a set period of time)

periodic (running on a week-by-week or month-by-month basis)

Rights and responsibilities

Both you and your landlord have certain rights and responsibilities, whether or not you have a tenancy agreement.

Tenancy types

Assured shorthold tenancies (ASTs)

The most common form of tenancy is an AST. Most new tenancies are automatically this type.

A tenancy can be an AST if all of the following apply:

the property you rent is private

your tenancy started on or after 15 January 1989

the property (the property you rent) is your main accommodation

your landlord does not live in the property (the property you rent)

A tenancy cannot be an AST if:

it (A tenancy) began or was agreed before 15 January 1989

the rent is more than £100,000 a year

the rent is less than £250 a year (less than £1,000 in London)

it (A tenancy)’s a business tenancy or tenancy of licensed premises

the property is a holiday let

your landlord is a local council

Other tenancies

There are other tenancies that are not as common as ASTs, including:

Excluded tenancies or licences

You may have an excluded tenancy or licence if you lodge with your landlord and share rooms with them, like a kitchen or bathroom. You’ll usually have less protection from eviction with this type of agreement.

Assured tenancies

Tenancies starting between 15 January 1989 and 27 February 1997 may be assured. You’ll have increased protection from eviction with this type of agreement (Assured tenancies).

Regulated tenancies

Tenancies starting before 15 January 1989 may be regulated. You’ll have increased protection from eviction and can apply for a ‘fair rent’.

Shelter has information on the different types of private tenancies and a tenancy checker so you can check which tenancy you have.

What should be in a tenancy agreement

A tenancy agreement should include:

the names of all people involved

the rental price and how it’s paid

information on how and when the rent will be reviewed

the deposit amount and how it will be protected

details of when the deposit can be fully or partly withheld (for example to repair damage you’ve caused)

the property address

the start and end date of the tenancy

any tenant or landlord obligations

an outline of bills you’re responsible for

It can also include information on:

whether the tenancy can be ended early and how this can be done

who’s responsible for minor repairs (other than those that the landlord (your landlord) is legally responsible for)

whether the property can be let to someone else (sublet) or have lodgers

The terms of the tenancy must be fair and comply with the law.

Your tenancy agreement cannot have anything in it that may indirectly discriminate against you.

Get legal advice before signing an agreement if you’re unsure of any terms. Once you’re happy with it, sign the agreement and get a copy of it.

Citizens Advice has a guide on tenancy agreements.

Changes to tenancy agreements

Both you and your landlord must agree in order to change the terms of the tenancy agreement (Your tenancy agreement).

Preventing discrimination

You cannot be discriminated against or harassed by your landlord because of:

age

gender

sexual orientation

disability (or because of something connected with your disability)

religion or belief

race

being a transgender person

being pregnant or having a baby

How to end your tenancy

Tenancies

You can read the guidance on moving house during the coronavirus outbreak.

Your tenancy agreement should say how much notice you need to give your landlord before you leave the property.

You’re responsible for paying rent for your entire fixed-term tenancy. You can move out early without paying rent for the full tenancy if:

there is a break clause in your tenancy agreement

your landlord agrees to end the tenancy early

Shelter has information about ending a tenancy.

Licence agreements

If your licence automatically runs out after a specific date and you want to end the agreement, you should let your landlord know this before your licence runs out.

If your landlord wants to end your tenancy

If your landlord wants you to leave, they must give you notice in a particular way, including certain information and warnings. This depends on the type of tenancy agreement and its (Your tenancy agreement) terms.

Some rules about length of notice have changed because of coronavirus (COVID-19).

Assured shorthold tenancies (ASTs)

Your landlord can take back their property without giving any reason if you have either:

a periodic tenancy

a fixed-term tenancy that has ended

To do this (take), both of the following must apply:

they (Your landlord)’ve protected your deposit in a deposit protection scheme

the date you must leave is at least 6 months after your original tenancy began (the one you had on first moving in)

How much notice your landlord must give

They (Your landlord) must give you written notice that they (Your landlord) want the property (their property) back (‘notice to quit’). They (Your landlord) must give you:

2 months if they (Your landlord) gave you notice before 26 March 2020

3 months if they (Your landlord) gave you notice between 26 March 2020 and 28 August 2020

6 months if they (Your landlord) gave you notice on or after 29 August 2020 (28 August 2020)

This change is because of coronavirus.

The notice must tell you the date you have to leave.

If your tenancy (your original tenancy) started or was renewed after 1 October 2015

Your landlord cannot evict you if they (Your landlord)’ve been served notice by the council because of a complaint you made to the council about the living conditions in the property (their property).

Your landlord must also have given you:

a copy of the leaflet ‘How to rent: the checklist for renting in England’

an energy performance certificate

a gas safety certificate

In England, they (Your landlord) must use ‘form 6a’ to give you notice. This is also known as ‘Notice seeking possession of a property let on an Assured Shorthold Tenancy’. In Wales, they (Your landlord) do not need to use form 6a but must give you notice in writing.

If you’re asked to leave during the fixed term

Your landlord can only ask you to leave during the fixed term if they (Your landlord) have certain reasons (‘grounds’). For example, if:

you’re behind with your rent payments (‘in arrears’)

you’ve used the property for illegal purposes, like selling drugs

you’ve damaged the property

Usually, the notice period they (Your landlord) must give varies up to 2 months.

If you were given notice between 26 March 2020 and 28 August 2020, your landlord must give you 3 months to leave the property.

If you’ve been given notice since 29 August 2020 (28 August 2020), your landlord must give you 6 months to leave. You might have to leave much sooner if you’re evicted using a section 8 notice, depending on the reason for eviction.

In Wales, the notice period must be:

at least 6 months for any notice given on or after 24 July 2020

at least 3 months for notices relating to antisocial behaviour

This is because of coronavirus.

Assured tenancies

Your landlord will need to use one of the reasons or ‘grounds’ for possession in the Housing Act 1988.

Excluded tenancies or licences

You’ll often have an excluded tenancy or licence if you live with your landlord as a lodger and share rooms with them.

Your landlord only needs to give ‘reasonable notice’ to quit. Usually this means the length of the rental payment period – so if you pay rent monthly, you’ll get one month’s notice.

The notice (‘reasonable notice’ to quit) does not have to be in writing.

Non-excluded tenancy or licence

Your landlord can end the let at any time by serving a written ‘notice to quit’. The notice period will depend on the tenancy or agreement, but is often at least 4 weeks.

Break clauses

If there’s a break clause in the tenancy agreement, your landlord can give you notice after this. However, your landlord does not have a guaranteed right to possession during the first 6 months of the tenancy.

If you do not leave the property

Your landlord cannot remove you by force. If the notice period (a written ‘notice to quit’) expires and you do not leave the property, your landlord may start the process of eviction through the courts.


Tax when you sell property

What you pay it on

You may have to pay Capital Gains Tax if you make a profit (‘gain’) when you sell (or ‘dispose of’) property that’s not your home, for example:

buy-to-let properties

business premises

land

inherited property

There are different rules if you:

sell your home

live abroad

are a company registered abroad

You’ll need to work out your gain to find out whether you need to pay tax.

This guide is also available in Welsh (Cymraeg).

When you do not pay

You do not usually need to pay tax on gifts to your husband, wife, civil partner or a charity.

You may get tax relief if the property is a business asset.

If the property was occupied by a dependent relative you may not have to pay. Find out more in the guidance on Private Residence Relief.

If you need to pay

You must report and pay any Capital Gains Tax on most sales of UK property within 30 days.

Work out your gain

Your gain is usually the difference between what you paid for your property and the amount you got when you sold (or ‘disposed of’) it.

If your combined capital gains are over your allowance for the year you’ll have to report and pay Capital Gains Tax.

Market value

In some situations you should use the market value of the property (Market value) when working out your gain. Do this if:

it (the property (Market value)) was a gift (there are different rules if it (the property (Market value)) was to your spouse, civil partner or a charity)

you sold it (the property (Market value)) for less than it (the property (Market value)) was worth to help the buyer

you inherited it (the property (Market value)) (and do not know the Inheritance Tax value)

you owned it (the property (Market value)) before April 1982

Selling in special circumstances

There are special rules for calculating your gain if:

you live abroad

you sell a lease or part of your land

your property is compulsorily purchased

Jointly owned property

If you own property jointly with other people, work out the gain for the share that you own.

Deduct costs

You can deduct costs of buying, selling or improving your property (the property (Market value)) from your gain. These include:

estate agents’ and solicitors’ fees

costs of improvement works, for example for an extension (normal maintenance costs, such as decorating, do not count)

Reliefs

You may get tax relief if the property was:

your home

a business asset

occupied by a dependent relative - find out more in the guidance on Private Residence Relief

Work out if you need to pay

Once you know what your gain on the property is, you can calculate if you need to report and pay Capital Gains Tax.

You cannot use the calculator if you:

sold land

sold business premises

sold other chargeable assets in the tax year, for example shares

reduced your share of a property that you still jointly own

claim any reliefs other than Private Residence Relief or Letting Relief

are a company, agent, trustee or personal representative

Calculate Capital Gains Tax on property

If you have Capital Gains Tax to pay

Reporting a loss

The rules are different if you need to report a loss.

Businesses

You may get tax relief if you sell property that you use for business. This may reduce or delay the amount of Capital Gains Tax you pay.

If the purpose of your business is to buy and sell property (you’re a property developer, for example) you do not pay Capital Gains Tax when you sell a property. Instead, you pay:

Income Tax - if you’re a sole trader or partner

Corporation Tax - if you’re a limited company

There are special rules for limited companies that dispose of a single residential property worth more than £2 million.

Selling overseas property

You pay Capital Gains Tax when you ‘dispose of’ overseas property if you’re resident in the UK (UK).

There are special rules if you’re resident in the UK (UK) but your permanent home (‘domicile’) is abroad.

You may also have to pay tax in the country you made the gain. If you’re taxed twice, you may be able to claim relief.

If you’re non-resident

Non-residents may have to pay UK tax on overseas property if they return to the UK (UK) within 5 years of leaving.


Claim planning appeal costs

Overview

You can claim costs if someone involved in your planning appeal behaves unreasonably and costs you money.

You make a claim for an ‘award of costs’ to the Planning Inspectorate. If you’re successful, you’ll have to reach an agreement with the other party about how much they pay.

You can be asked to pay costs if you behave unreasonably during your own appeal. The Planning Inspectorate can do this even if nobody’s claiming costs against you.

Deadline to claim for costs

The deadline (Deadline to claim for costs) depends on whether your appeal will be decided:

at a hearing or inquiry - apply before it closes

in writing - apply when you appeal for householder, commercial and tree preservation orders, or before the final comments stage for anything else

The deadline (Deadline to claim for costs) is different for claims about:

a site visit (eg someone didn’t attend) - apply within 7 days

a withdrawn appeal or enforcement notice - apply within 4 weeks

When to claim

You may be able to claim costs if someone involved in your appeal (your planning appeal) behaves unreasonably and costs you money. This includes if they:

fail to co-operate with you or others

miss deadlines

fail to turn up to a site visit, hearing or inquiry

gave information that was wrong or declared after the deadline (Deadline to claim for costs)

What costs you can claim

You can claim for costs directly related to your appeal (your planning appeal), for example:

time preparing for an appeal

attending a hearing or inquiry

the use of consultants to provide detailed technical advice

witnesses if you need to pay them (consultants)

You can’t claim for costs relating to your original planning application.

How to claim

Claim for costs by filling in the claim form. Return it to the address on the form.

Alternatively, you can send a letter to the Planning Inspectorate. Include why you think someone has behaved unreasonably and how this has cost you money.

After you claim

The Planning Inspectorate will consider your claim. The party being asked to pay will have an opportunity to respond in writing.

If you’re successful, you’ll be given either:

a full award - you can recover all your costs including the cost of claiming

a partial award - you can only recover some costs

The award doesn’t tell you how much you should get. It’s your responsibility to prove to the other party how much you’ve spent on the appeal (your planning appeal).

If they (the other party) won’t pay

You can make a court claim for money if the other party won’t pay.


Repossession

Get advice

You may be able to postpone or stop your home being repossessed.

Check if you can get legal aid to help with your legal costs. You can get advice from Civil Legal Advice if you’re eligible.

Find a solicitor.

You can also get free advice from:

Citizens Advice

National Debtline

Shelter

your local council

The law for repossession in Scotland is different.

Before it goes to court

What your mortgage lender must do

Before a mortgage lender can repossess your home, they must:

tell you how much you owe

consider a request from you to change the way you pay your mortgage

respond to any offer of payment you make

give you reasons for turning down your offer of payment within 10 days

give you a reasonable amount of time to consider any proposal they (a mortgage lender) make

give you 15 days’ written warning if they (a mortgage lender) plan to start court action

tell you the date and time of a repossession hearing

let your council (your local council) know within 5 days of getting notification of the date of the court hearing (a repossession hearing), in case you need to apply to the council (your local council) as homeless

Finding a solution

Even if your mortgage lender starts a court action, you may still be able to reach an agreement with them.

You’ll still need to attend court to tell the judge about the agreement, unless the court tells you the hearing (a repossession hearing)’s been cancelled or postponed.

Defence form

If your lender starts a repossession action against you, the court will send you a blank defence form and guidance on how to fill it in.

You can use the form (a blank defence form) to explain why you think the lender (your lender) should not repossess your home. You need to return it (a blank defence form) within 14 days.

The court will also send you:

copies of the claim forms for possessing your home, filled in by your lender

a court hearing date

the court’s contact details

Help with legal costs

Legal aid

If you’re on a low income you may be able to get legal aid.

Free legal advice on the day

If you have not got help before, you can get last-minute legal help under the Housing Possession Court Duty scheme.

The scheme (the Housing Possession Court Duty scheme) runs in county courts in England and Wales. It (the Housing Possession Court Duty scheme) provides you with a specialist adviser on the day of your hearing who can:

represent you

help you come to an arrangement with your mortgage lender (your lender) to pay off your debts

To find out about the scheme in your area, contact your local council or the court where your case is being heard.

The hearing

Repossession hearings normally take place in a judge’s chambers, not in a court room (although it’s treated as a court).

You can bring an adviser or friend to the hearing (your hearing), although they must be an adult.

If you do not attend the court hearing (your hearing), it’s likely the judge (a judge’s) will give your mortgage lender (your lender) the right to evict you.

You must keep to any agreement you make in court to pay off arrears. If you do not, you may still risk losing your home.

What to bring with you

You’ll likely be asked for proof of your finances. This can include:

payslips

bank statements

job offers

letters about benefits

estate agent letter, for example if you’re trying to sell your home to pay off the mortgage

Repossession orders

The lender (your lender) can only repossess your home if the court grants permission.

The judge (a judge’s) could decide to:

adjourn (delay) the hearing (your hearing)

set aside the case, which means no order will be made and the hearing is finished

make a repossession order

Outright possession order

This gives the lender (your lender) a legal right to own your home on the date given in the order and is sometimes called an ‘order for possession’. This is usually 28 days after your court hearing.

If you do not leave your home by the date given in the order, your lender can ask the court to evict you.

Suspended possession order

This (Suspended possession order) means that if you make regular payments as set out in the order, you can stay in your home.

If you do not make the payments, your lender can ask the court to evict you.

Money order

This (Money order) means that you have to pay the lender (your lender) the amount set out in the order (Money order).

If you do not make these payments:

money could be deducted from your wages or bank account

bailiffs may take away things you own

Your lender cannot use a money order to evict you from your home. If you do not make payments set out in a money order on time, your lender could go to court again. As a result, the judge could decide to give them (your lender) a possession order.

Possession order with money judgment

A money judgment is usually added to a possession order. It means you owe a specific amount of money usually made up of:

your mortgage arrears

court fees

your lender’s (your lender) legal costs

A money judgment will not apply if:

you pay your mortgage arrears and any amount set out in a suspended order

your lender sells your home and the sale price is more than the amount set out in the money judgment

If you do not pay the amount set out in the money judgment, the lender (your lender) may ask the court to carry out the instructions in the possession order and the judgment.

Time order

This means that the judge changes the amount you pay on your mortgage for a set time by:

changing the regular amount you pay

changing the interest rate on your mortgage

delaying the next time you have to make a payment

A time order is usually only made on some types of loan like a second mortgage.

Delaying eviction

You can ask a judge to ‘suspend the warrant for possession’. This means delaying the eviction or allowing you to stay in your home if you are able to make payments again.

A new hearing will be held but the judge (a judge) will not automatically agree to suspend the possession warrant (the warrant for possession) – it depends what happens in court.

If you want to get a warrant suspended, get advice immediately.

Applying for a suspension

If you want to apply for a suspension, you should fill out the application notice and either send it or deliver it to the court.

You must tell the court that you need a hearing at short notice (before your eviction date). You’ll have to pay a court fee.

You may not have to pay the fee (otherwise known as ‘fee remission’) if you’re on benefits or low pay.

Appealing a judge's decision

If you think the judge (a judge's) made mistakes about the law or the facts of your case in the original hearing, you may be able to appeal.

Get legal advice if you want to appeal.

Normally the appeal will be heard by a more senior judge.

Permission to appeal

You can ask the judge at the end of your original possession hearing (the original hearing) if you can appeal.

If the judge refuses to give permission to appeal, you can ask a more senior judge.

If you get permission, make an application as soon as possible after your original possession hearing (the original hearing). You’ll have to pay a court fee.

You may not have to pay the fee (a court fee) if you’re on benefits or low pay.

What could happen

At the appeal, the judge can make a number of decisions including:

keeping the original decision (a judge's decision)

dismissing the previous decision or changing it (a judge's decision)

ordering a new hearing

The judge can also decide who pays the legal costs of the appeal.

If your home is repossessed

Help from your council

Your local council must give you advice to help you find a new home.

Depending on your circumstances, they (the judge) may also be able to provide you with emergency accommodation or a more permanent home.

Buying another property

You must tell any new mortgage lender that your previous home was repossessed. This could make getting a new mortgage hard.

Your previous lender may be able to claim some of the proceeds of your new home if you still owe them money when you sell it.


What you pay it on

You may have to pay Capital Gains Tax if you make a profit (‘gain’) when you sell (or ‘dispose of’) a personal possession for £6,000 or more.

Possessions you may need to pay tax on include:

jewellery

paintings

antiques

coins and stamps

sets of things, eg matching vases or chessmen

You’ll need to work out your gain to find out whether you need to pay tax.

When you don’t pay it (your gain)

You don’t usually need to pay tax on gifts to your husband, wife, civil partner or a charity.

You don’t pay Capital Gains Tax on:

your car - unless you’ve used it for business

anything with a limited lifespan, eg clocks - unless used for business

Jointly owned possessions

You’re exempt from paying tax on the first £6,000 of your share if you own a possession with other people.

Work out your gain

Your gain is usually the difference between what you paid for your personal possession (a personal possession) and what you sold it (a personal possession) for.

Use the market value instead if:

it (a personal possession) was a gift (there are different rules if it (a personal possession) was to your spouse, civil partner or a charity)

you sold it (a personal possession) for less than it was worth to help the buyer

you inherited it (a personal possession) (and don’t know the Inheritance Tax value)

you owned it (a personal possession) before April 1982

Deduct costs

You can deduct certain costs of buying, selling or improving your personal possession (a personal possession) from your gain.

Costs you can deduct include:

fees, eg for valuing or advertising

costs to improve your possession (a personal possession) (but not repairs)

VAT (unless you can reclaim it (a personal possession))

You can’t deduct certain costs, including:

interest on a loan to buy your possession

costs you can claim as expenses, if you’ve used your possession (a personal possession) for business

Contact HM Revenue and Customs (HMRC) if you’re not sure whether you can deduct a certain cost.

If you sold it (a personal possession) for between £6,000 and £15,000

You may be able to reduce your gain if you got between £6,000 and £15,000 for your possession (a personal possession) when you sold or disposed of it (a personal possession).

Subtract £6,000 from the amount you’ve received.

Multiply this by 1.667.

Compare this with the actual gain - use the lower amount as your capital gain.

Work out if you need to pay

When you know your gain, you can work out if you need to report and pay Capital Gains Tax.

If you’ve used your possession for business, you can reduce or delay the tax you pay if you’re eligible for tax relief.

Reporting a loss

The rules are different if you need to report a loss.

You can claim losses for possessions sold for less than £6,000.  Work out your loss by using £6,000 as the amount you sold your possession for, and report it in your tax return.

Possessions with a limited lifespan

You don’t have to pay Capital Gains Tax on personal possessions with a lifespan of less than 50 years. This covers all machinery, and includes things like antique clocks or watches.

Different rules apply if you’ve used the possession for business. You don’t have to pay Capital Gains Tax if it doesn’t qualify for capital allowances. If it qualifies, you may need to pay Capital Gains Tax, but you can’t claim losses.

Possessions that are part of a set

If you sell all or part of a set to the same person for less than £6,000, you won’t pay tax.

If you sell parts of a set to different people, you won’t pay tax on each part sold for less than £6,000.

Sets include things like chessmen, books by the same author, matching vases and sets of china.


Trusts and taxes

Overview

A trust is a way of managing assets (money, investments, land or buildings) for people. There are different types of trusts and they are taxed differently.

Trusts involve:

the ‘settlor’ - the person who puts assets into a trust

the ‘trustee’ - the person who manages the trust (a trust)

the ‘beneficiary’ - the person who benefits from the trust (a trust)

This guide is also available in Welsh (Cymraeg).

What trusts are for

Trusts are set up for a number of reasons, including:

to control and protect family assets

when someone’s too young to handle their affairs

when someone cannot handle their (someone) affairs because they (someone)’re incapacitated

to pass on assets while you’re still alive

to pass on assets when you die (a ‘will trust’)

under the rules of inheritance if someone dies without a will (in England and Wales)

What the settlor does

The settlor decides how the assets in a trust should be used - this is usually set out in a document called the ‘trust deed’.

Sometimes the settlor can also benefit from the assets in a trust - this is called a ‘settlor-interested’ trust and has special tax rules. Find out more by reading the information on different types of trust.

What trustees do

The trustees (trustees) are the legal owners of the assets held in a trust. Their (trustees) role is to:

deal with the assets (the assets held in a trust) according to the settlor’s (the settlor) wishes, as set out in the trust deed (a document called the ‘trust deed’) or their (the settlor) will

manage the trust (a trust) on a day-to-day basis and pay any tax due

decide how to invest or use the trust’s (a trust) assets (the assets held in a trust)

If the trustees (trustees) change, the trust (a trust) can still continue, but there always has to be at least one trustee.

Beneficiaries

There might be more than one beneficiary, like a whole family or defined group of people. They may benefit from:

the income of a trust only, for example from renting out a house held in a trust

the capital only, for example getting shares held in a trust when they reach a certain age

both the income and capital of the trust (a trust)

If you need help

Contact a solicitor or tax advisor. They (trustees) can also talk to HM Revenue and Customs (HMRC) on your behalf if you give them (trustees) permission.

You can also get help from the Society of Trust and Estate Practitioners.

Types of trust

The main types of trust are:

bare trusts

interest in possession trusts

discretionary trusts

accumulation trusts

mixed trusts

settlor-interested trusts

non-resident trusts

Each type of trust is taxed differently. Trusts involve a ‘trustee’, ‘settlor’ and ‘beneficiary’.

Bare trusts

Assets in a bare trust are held in the name of a trustee. However, the beneficiary has the right to all of the capital and income of the trust (a trust) at any time if they’re 18 or over (in England and Wales), or 16 or over (in Scotland). This means the assets set aside by the settlor will always go directly to the intended beneficiary.

Bare trusts are often used to pass assets to young people - the trustees look after them until the beneficiary is old enough.

Interest in possession trusts

These are trusts where the trustee must pass on all trust income to the beneficiary as it arises (less any expenses).

Discretionary trusts

These are where the trustees can make certain decisions about how to use the trust income, and sometimes the capital.

Depending on the trust deed, trustees can decide:

what gets paid out (income or capital)

which beneficiary to make payments to

how often payments are made

any conditions to impose on the beneficiaries

Discretionary trusts are sometimes set up to put assets aside for:

a future need, like a grandchild who may need more financial help than other beneficiaries at some point in their life

beneficiaries who are not capable or responsible enough to deal with money themselves (the trustees)

Accumulation trusts

This (Accumulation trusts) is where the trustees can accumulate income within the trust and add it to the trust’s capital. They may also be able to pay income out, as with discretionary trusts.

Mixed trusts

These (Mixed trusts) are a combination of more than one type of trust. The different parts of the trust (Mixed trusts) are treated according to the tax rules that apply to each part.

Settlor-interested trusts

These are where the settlor or their (the settlor) spouse or civil partner benefits from the trust. The trust could be:

an interest in possession trust

an accumulation trust

a discretionary trust

Non-resident trusts

This is a trust where the trustees are not resident in the UK for tax purposes. The tax rules for non-resident trusts are very complicated.

Parental trusts for children

These are trusts set up by parents for children under 18 who have never been married or in a civil partnership. They’re not a type of trust in their own right but will be either:

a bare trust

an interest in possession trust

an accumulation trust

a discretionary trust

Read the information on types of trust to find out more.

Income Tax

Income Tax on income from the trust is paid by the trustees, but the ‘settlor’ (the settlor) is responsible for it. This means:

The trustees pay Income Tax on the trust income (income from the trust) by filling out a Trust and Estate Tax Return.

They (the trustees) give the settlor a statement of all the income and the rates of tax charged on it.

The settlor tells HM Revenue and Customs (HMRC) about the tax the trustees have paid on their behalf when filling out their (the trustees) Self Assessment tax return.

Trusts for vulnerable people

Some trusts for disabled people or children get special tax treatment. These are called ‘trusts for vulnerable beneficiaries’.

Who qualifies as a vulnerable beneficiary

A vulnerable beneficiary is either someone under 18 whose parent has died or a disabled person who is eligible for any of the following benefits (even if they do not receive them):

Attendance Allowance

Disability Living Allowance (either the care component at the highest or middle rate, or the mobility component at the higher rate)

Personal Independence Payment

an increased disablement pension

Constant Attendance Allowance

Armed Forces Independence Payment

A vulnerable beneficiary can also be someone who is unable to manage their own affairs because of a mental health condition - check with a medical professional that it’s covered by the Mental Health Act 1983.

Trusts that qualify for special tax treatment

A trust does not qualify for special Income Tax treatment if the person setting it up can benefit from the trust income. However, from 2008 to 2009 it would qualify for special Capital Gains Tax treatment.

Trusts for children who’ve lost a parent are usually set up by the parent’s will, or by special rules of inheritance if there’s no will.

If someone dies without a will in Scotland, a trust set up there for their children is usually treated as a bare trust for tax purposes.

If there’s more than one beneficiary

If there are beneficiaries who are not vulnerable, the assets and income for the vulnerable beneficiary must be:

identified and kept separate

used only for that person (the vulnerable beneficiary)

Only that part of the trust (A trust) gets special tax treatment.

Claiming special tax treatment

To claim special treatment for Income Tax and Capital Gains Tax, the trustees have to fill in the ‘Vulnerable Person Election’ form.

If there’s more than one vulnerable beneficiary, each needs a separate form.

The trustees and beneficiary must both sign the form.

If the vulnerable person (the vulnerable beneficiary) dies or is no longer vulnerable, the trustees must tell HMRC.

Income Tax

In a trust with a vulnerable beneficiary, the trustees are entitled to a deduction of Income Tax. It’s calculated like this:

Trustees work out what their trust Income Tax would be if there was no claim for special treatment - this will vary according to which type of trust it (A trust) is.

They (Trustees) then work out what Income Tax the vulnerable person (a vulnerable beneficiary) would have paid if the trust income had been paid directly to them (someone) as an individual.

They (Trustees) can then claim the difference between these 2 figures as a deduction from their (Trustees) own Income Tax liability.

This is a complicated calculation but there’s a detailed worked example on the HMRC website.

Capital Gains Tax

Capital Gains Tax may be due if assets are sold, given away, exchanged or transferred in another way and they’ve gone up in value since being put into trust.

Tax is only paid by trustees if the assets (assets) have increased in value above the ‘annual exempt amount’, which is an allowance of £12,300 for people who have a mental or physical disability, or £6,150 for other trustees.

Trustees are responsible for paying any Capital Gains Tax due. If the trust is for vulnerable people, trustees can claim a reduction, which is calculated like this:

They (trustees) work out what they (trustees) would pay if there was no reduction.

They (trustees) then work out what the beneficiary would have to pay if the gains had come directly to them (trustees).

They (trustees) can claim the difference between these 2 amounts (the difference between these 2 figures) (these 2 figures) as a reduction on what they (trustees) have to pay in Capital Gains Tax using form SA905.

This special Capital Gains Tax treatment does not apply in the tax year when the beneficiary (trustees) dies.

Inheritance Tax

These are the situations when trusts for vulnerable people get special Inheritance Tax treatment:

for a disabled person whose trust was set up before 8 April 2013 - at least half of the payments from the trust must go to the disabled person during their lifetime

for a disabled person whose trust was set up on or after 8 April 2013 - all payments must go to the disabled person, except for up to £3,000 per year (or 3% of the assets, if that’s lower), which can be used for someone else’s benefit

when someone who has a condition that’s expected to make them disabled sets up a trust for themselves

for a bereaved minor - they must take all the assets and income at (or before becoming) 18

There’s no Inheritance Tax charge:

if the person who set up the trust survives 7 years from the date they set it up

on transfers made out of a trust to a vulnerable beneficiary

When the beneficiary (a vulnerable beneficiary) dies, any assets held in the trust on their behalf are treated as part of their estate and Inheritance Tax may be charged.

Trusts usually have 10-year Inheritance Tax charges, but trusts with vulnerable beneficiaries are exempt.

Trusts and Income Tax

Different types of trust income have different rates of Income Tax.

Each type of trust is taxed differently. Trusts involve a ‘trustee’, ‘settlor’ and ‘beneficiary’.

Accumulation or discretionary trusts

Trustees are responsible for paying tax on income received by accumulation or discretionary trusts. The first £1,000 is taxed at the standard rate.

If the settlor has more than one trust, this £1,000 is divided by the number of trusts they have. However, if the settlor has set up 5 or more trusts, the standard rate band for each trust is £200.

The tax rates are below.

Trust income up to £1,000

Type of income | Tax rate

Dividend-type income | 7.5%

All other income | 20%

Trust income over £1,000

Type of income | Tax rate

Dividend-type income | 38.1%

All other income | 45%

Dividends

Trustees do not qualify for the dividend allowance. This means trustees pay tax on all dividends depending on the tax band they fall within.

Interest in possession trusts

The trustees are responsible for paying Income Tax at the rates below.

Type of income | Income Tax rate

Dividend-type income | 7.5%

All other income | 20%

Sometimes the trustees ‘mandate’ income to the beneficiary. This means it goes to them directly instead of being passed through the trustees.

If this (goes) happens, the beneficiary needs to include this on their (the beneficiary) Self Assessment tax return and pay tax on it.

Bare trusts

If you’re the beneficiary of a bare trust you’re responsible for paying tax on income from it.

You need to tell HMRC about the income on a Self Assessment tax return.

If you do not usually send a tax return, you need to register for self-assessment by 5 October following the tax year you had the income.

Settlor-interested trusts

The settlor is responsible for Income Tax on these trusts (Settlor-interested trusts), even if some of the income is not paid out to them (the beneficiary). However, the Income Tax is paid by the trustees as they (the trustees) receive the income.

The trustees pay Income Tax on the trust income by filling out a Trust and Estate Tax Return.

They (the trustees) give the settlor a statement of all the income and the rates of tax charged on it.

The settlor tells HMRC about the tax the trustees have paid on their behalf on a Self Assessment tax return.

The rate of Income Tax depends on what type of trust the settlor-interested trust is.

Other types of trust

There are special tax rules for parental trusts for children, trusts for vulnerable people and trusts where the trustees are not resident in the UK for tax purposes. These are called non-resident trusts.

If you’re the beneficiary

Depending on the type of trust and your income, you might be able to claim some of the Income Tax back.

If you’re the trustee

Get help completing the Trust and Estate Tax return.

If you need more help

There’s more detailed guidance on trusts and Income Tax.

Contact HMRC or get professional tax advice if you need help.

Trusts and Capital Gains Tax

Capital Gains Tax is a tax on the profit (‘gain’) when something (an ‘asset’) that’s increased in value is taken out of or put into a trust.

When Capital Gains Tax might be payable

If assets are put into a trust

Tax is paid by either the person:

selling the asset to the trust

transferring the asset (the ‘settlor’)

If assets are taken out of a trust

The trustees usually have to pay the tax (Capital Gains Tax) if they sell or transfer assets on behalf of the beneficiary.

There’s no tax to pay in bare trusts if the assets are transferred to the beneficiary.

Sometimes an asset might be transferred to someone else but Capital Gains Tax is not payable. This happens when someone dies and an ‘interest in possession’ ends.

A beneficiary gets some or all of the assets in a trust

Sometimes the beneficiary of a trust becomes ‘absolutely entitled’ and can tell the trustees what to do with the assets, for example when they reach a certain age.

In this case, the trustees pay Capital Gains Tax based on the assets’ (the assets) market value when the beneficiary (the beneficiary of a trust) became entitled to them (the assets).

Non-UK resident trusts

The rules for Capital Gains Tax on non-UK resident trusts are complicated. You can get help with your tax.

Working out total gains

Trustees need to work out the total taxable gain to know if they have to pay Capital Gains Tax.

Allowable costs

Trustees can deduct costs to reduce gains, including:

the cost of the property (including any administration fees)

professional fees, for example for a solicitor or stockbroker

the cost of improving property or land to increase its value, for example building a conservatory (but not repairs or regular maintenance)

Tax reliefs

Trustees might be able to reduce or delay the amount of tax the trust (a trust) pays if gains are eligible for tax relief.

Relief | Description

Private Residence Relief | Trustees pay no Capital Gains Tax when they sell a property the trust (a trust) owns. It must be the main residence for someone allowed to live there under the rules of the trust (a trust).

Entrepreneurs’ Relief | Trustees pay 10% Capital Gains Tax on qualifying gains if they sell assets used in a beneficiary’s business, which has now ended. They may also get relief when they sell shares in a company where the beneficiary had at least 5% of shares and voting rights.

Hold-Over Relief | Trustees pay no tax if they transfer assets to beneficiaries (or other trustees in some cases). The recipient pays tax when they sell or dispose of the assets, unless they also claim relief.

Tax-free allowance

Trustees only have to pay Capital Gains Tax if the total taxable gain is above the trust’s (a trust) tax-free allowance (called the Annual Exempt Amount).

The tax-free allowance for trusts (Tax-free allowance) is:

£12,300 if the beneficiary is vulnerable - a disabled person or a child whose parent has died

If there’s more than one beneficiary, the higher allowance (Tax-free allowance) may apply even if only one of them is vulnerable.

See tax-free allowances for previous years.

The tax-free allowance (Tax-free allowance) may be reduced if the trust’s (a trust) settlor has set up more than one trust (‘settlement’) since 6 June 1978.

There’s more detailed information about Capital Gains Tax and Self Assessment for trusts.

Report gains to HMRC

If you’re the trustee, report any gains as part of your Trust and Estate Tax Return.

You’ll need to download and fill in form SA905 if you’re sending your tax return by post.

If you’re the beneficiary, you need to report and pay through a Self Assessment tax return.

The rules are different for reporting a loss.

If you need more help

There’s more detailed guidance on Capital Gains Tax.

Contact HMRC or get professional tax advice if you need help.

Trusts and Inheritance Tax

Inheritance Tax may have to be paid on a person’s estate (their money and possessions) when they die.

Inheritance Tax is due at 40% on anything above the threshold - but there’s a reduced rate of 36% if the person’s (a person’s) will leaves more than 10% of their (a person’s) estate (a person’s estate (their money and possessions)) to charity.

Inheritance Tax can also apply when you’re alive if you transfer some of your estate into a trust.

When Inheritance Tax is due

The main situations when Inheritance Tax is due are:

when assets are transferred into a trust

when a trust reaches a 10-year anniversary of when it was set up (there are 10-yearly Inheritance Tax charges)

when assets are transferred out of a trust (known as ‘exit charges’) or the trust ends

when someone dies and a trust is involved when sorting out their estate

What you pay Inheritance Tax on

You pay Inheritance Tax on ‘relevant property’ - assets like money, shares, houses or land. This includes the assets in most trusts.

There are some occasions where you may not have to pay Inheritance Tax - for example where the trust contains excluded property.

Special rules

Some types of trust are treated differently for Inheritance Tax purposes.

Bare trusts

These are where the assets in a trust are held in the name of a trustee but go directly to the beneficiary, who has a right to both the assets and income of the trust.

Transfers into a bare trust may also be exempt from Inheritance Tax, as long as the person making the transfer survives for 7 years after making the transfer.

Interest in possession trusts

These (Interest in possession trusts) are trusts where the beneficiary is entitled to trust income as it’s produced - this is called their ‘interest in possession’.

On assets transferred into this type of trust (Interest in possession trusts) before 22 March 2006, there’s no Inheritance Tax to pay.

On assets transferred on or after 22 March 2006, the 10-yearly Inheritance Tax charge may be due.

During the life of the trust (a trust) there’s no Inheritance Tax to pay as long as the asset stays in the trust (a trust) and remains the ‘interest’ of the beneficiary.

Between 22 March 2006 and 5 October 2008:

beneficiaries of an interest in possession trust could pass on their interest in possession to other beneficiaries, like their children

this (pass) was called making a ‘transitional serial interest’

there’s no Inheritance Tax to pay in this situation

From 5 October 2008:

beneficiaries of an interest in possession trust cannot pass their (beneficiaries of an interest in possession trust) interest on as a transitional serial interest

if an interest is transferred after this date (5 October 2008) there may be a charge of 20% and a 10-yearly Inheritance Tax charge will be payable unless it (an interest in possession trust)’s a disabled trust

If you inherit an interest in possession trust from someone who has died, there’s no Inheritance Tax at the 10-year anniversary. Instead, 40% tax will be due when you die.

If the trust is set up by a will

Someone might ask that some or all of their assets are put into a trust. This is called a ‘will trust’.

The personal representative of the deceased person (Someone) has to make sure that the trust (a trust) is properly set up with all taxes paid, and the trustees make sure that Inheritance Tax is paid on any future charges.

If the deceased (Someone) transferred assets into a trust before they (Someone) died

If you’re valuing the estate of someone who has died, you’ll need to find out whether they made any transfers in the 7 years before they died. If they did, and they paid 20% Inheritance Tax, you’ll need to pay an extra 20% from the estate.

Even if no Inheritance Tax was due on the transfer, you still have to add its value to the person’s (Someone) estate (the estate of someone who has died) when you’re valuing it (the estate of someone who has died) for Inheritance Tax purposes.

Trusts for bereaved minors

A bereaved minor is a person under 18 who has lost at least one parent or step-parent. Where a trust is set up for a bereaved minor, there are no Inheritance Tax charges if:

the assets in the trust (a trust) are set aside just for bereaved minor (a bereaved minor)

they (a bereaved minor) become fully entitled to the assets (the assets in the trust (a trust)) by the age of 18

A trust for a bereaved young person can also be set up as an 18 to 25 trust - the 10-yearly charges do not apply. However, the main differences are:

the beneficiary must become fully entitled to the assets in the trust by the age of 25

when the beneficiary is aged between 18 and 25, Inheritance Tax exit charges may apply

Trusts for disabled beneficiaries

There’s no 10-yearly charge or exit charge on this type of trust as long as the asset stays in the trust (a trust) and remains the ‘interest’ of the beneficiary.

You also do not have to pay Inheritance Tax on the transfer of assets into a trust for a disabled person as long as the person making the transfer survives for 7 years after making the transfer.

Paying Inheritance Tax

You pay Inheritance Tax using form IHT100.

If you’re valuing the estate of someone who’s died, you may have to value other assets apart from trusts to see if Inheritance Tax is due.

More help and information

There’s more detailed guidance on trusts and Inheritance Tax.

Contact HMRC or get professional tax advice if you need help.

Beneficiaries - paying and reclaiming tax on trusts

If you’re a trust beneficiary there are different rules depending on the type of trust. You might have to pay tax through Self Assessment or you might be entitled to a tax refund.

If you do not usually send a tax return and need to, you must register for Self Assessment by 5 October following the tax year you had the income.

Read the information on the different types of trust to understand the main differences between them. If you’re not sure what type of trust you have, ask the trustees.

If you’re the beneficiary of a bare trust you are responsible for declaring and paying tax on its income. Do this on a Self Assessment tax return.

Interest in possession trusts

If you’re the beneficiary of this type of trust (Interest in possession trusts), you’re entitled to its (Interest in possession trusts) income (after expenses) as it arises.

If you ask for a statement, the trustees must tell you:

the different sources of income

how much income you’ve been given

how much tax has been paid on the income

You’ll usually get income sent through the trustees, but they (the trustees) might pass it to you directly without paying tax first. If this happens you need to include it on your Self Assessment tax return.

If you do not usually send a tax return you must register for Self Assessment by 5 October the year after you were given the income.

If you’re a basic rate taxpayer

You will not owe any extra tax. You’ll still need to complete a Self Assessment tax return to show the income you receive from an interest in possession trust but you will get a credit for the tax paid by the trustees. This means the income is not taxed twice.

If you’re a higher rate taxpayer

You’ll have to pay extra tax on the difference between what tax the trustees have paid and what you, as a higher rate taxpayer, are liable for. This will be calculated when you do your Self Assessment.

How to reclaim tax

You can reclaim tax paid on:

dividends (if you’re entitled to dividend allowance)

savings interest (if you’re entitled to personal savings allowance)

trade and property income (if you’re entitled to trading allowance or property allowance)

The allowance amount will be reduced if it’s already been used against some income. The allowance you have left is called the ‘available allowance’.

If the amount of income you receive is less than or equal to the available allowance (The allowance you have left), you can reclaim all of the tax paid.

If the amount of income you receive is more than the available allowance (The allowance you have left), you can only claim the tax paid on the available allowance (The allowance you have left).

If you’re a Self Assessment taxpayer the repayment will be calculated as part of your return.

If you’re not a Self Assessment taxpayer you can reclaim the tax (tax) using form R40.

You need to make a separate claim for each tax year.

Accumulation or discretionary trusts

With these trusts all income received by beneficiaries is treated as though it has already been taxed at 45%. If you’re an additional rate taxpayer there will be no more tax to pay.

You may be able to claim tax back on trust income you’ve received if any of the following apply:

you’re a non-taxpayer

you pay tax at the basic rate of 20%

you pay tax at the higher rate of 40%

You can reclaim the tax paid using form R40. If you complete a tax return, you can claim through Self Assessment.

Settlor-interested discretionary trusts

If a settlor-interested trust is a discretionary trust, payments made to the settlor’s spouse or civil partner are treated as though they’ve already been taxed at 45%. There’s no more tax to pay. However, unlike payments made from other types of trusts, the tax credit cannot be claimed back.

Non-resident trusts

This (Non-resident trusts) is a trust where the trustees are not resident in the UK for tax purposes. The tax rules for this type of trust are very complicated - there’s detailed guidance on non-resident trusts.

If a pension scheme pays into a trust

When a pension scheme pays a taxable lump sum into a trust after the pension holder dies, the payment is taxed at 45%.

If you’re a beneficiary and receive a payment funded by this lump sum (a taxable lump sum), you’ll also be taxed.

You can claim back tax paid on the original lump sum (a taxable lump sum) - do this on your Self Assessment tax return if you complete one, or using form R40.

The trust will tell you the amount you need to report - this will normally be more than the amount you actually receive.

Trustees - tax responsibilities

As the trustee, you’re responsible for reporting and paying tax on behalf of the trust.

If there are 2 or more trustees, nominate one as the ‘principal acting trustee’ to manage its (The trust) tax. The other trustees are still accountable, and can be charged tax and interest if the trust does not pay.

Registering a trust

Once a trust becomes liable for tax, you must register the trust with HM Revenue and Customs.

Sending tax returns

You must report the trust’s (The trust) income and gains in a trust and estate Self Assessment tax return after the end of each tax year. You can either:

buy software to send it electronically by 31 January

fill in paper form SA900 and post it to HMRC (HM Revenue and Customs) by 31 October (3 months earlier)

You can also get help, for example from HMRC (HM Revenue and Customs) or by getting an accountant to do your return for you.

After you’ve sent your return, HMRC (HM Revenue and Customs) will tell you how much you owe. You’ll need to pay your Self Assessment bill by the deadline.

You’ll need to collect and keep records (for example bank statements) to complete your tax return.

Telling beneficiaries about tax and income

You must give the beneficiary a statement with the amount of income and tax paid by the trust, if they ask. You can use form R185 (trust) to do this. There’s a different form if you need to provide a statement to a settlor who retains an interest.

If there’s more than one beneficiary, you must give each of them this information relative to the amount they receive.

Death benefit payments from a pension scheme

You must give the beneficiary extra information if both the following apply:

you make a payment funded by a taxable lump sum from a pension scheme

the pension holder has died

Use form R185 (LSDB) if you’re a trustee. There’s a different form if you’re a pension administrator.

You must tell the beneficiary within 30 days.

Other responsibilities

You may have to report other things to HMRC. You need to:

use the online service to tell HMRC if there are any changes to the trust

fill in form IHT100 when the trust needs to pay Inheritance Tax

Your other responsibilities as a trustee depend on the type of trust and any instructions from the person who set up the trust in the trust deed.

When you must register a trust

You must register your trust with HM Revenue and Customs (HMRC) (HMRC) if it becomes liable for any of the following:

Capital Gains Tax

Income Tax

Inheritance Tax

Stamp Duty Land Tax or Land and Buildings Transaction Tax in Scotland

Stamp Duty Reserve Tax

You must also register a trust to claim tax relief.

Non-resident trusts

You must register a non-resident trust if it becomes liable for:

tax on UK income

tax on UK assets

You can get professional advice from a solicitor or tax advisor about registering a trust.

When you do not need to register your trust

You do not need to register your trust if:

it (your trust) has to pay Income Tax of less than £100 on interest

only the settlor or beneficiary of the trust (your trust) has to pay tax

it (your trust)’s a bare trust

it (your trust)’s a charitable trust

it (your trust)’s a resulting trust and the assets go back to the settlor because all the beneficiaries have died

it (your trust)’s a statutory trust created through legislation

it (your trust)’s a constructive trust imposed by a court

it (your trust) holds a pension scheme already registered with HMRC

You also do not need to register your trust if you have to file information:

under the Foreign Account Tax Compliance Act (FATCA)

for Common Reporting Standard (CRS) purposes

Deadlines for registering

The deadline depends on the tax your trust is liable for.

Trusts liable for Income Tax or Capital Gains Tax

If it’s the first time your trust is liable for either tax (Income Tax or Capital Gains Tax), the deadline is 5 October in the tax year after it first becomes liable for these taxes (Income Tax or Capital Gains Tax).

For example, if your trust first becomes liable for Income Tax during the 2020 to 2021 tax year, you must register by 5 October 2021.

If your trust has been liable for either tax (Income Tax or Capital Gains Tax) before, the deadline is 31 January in the tax year after it’s again liable for these taxes (Income Tax or Capital Gains Tax).

For example, if your trust is liable for Income Tax during the 2020 to 2021 tax year and it has been liable for Income Tax before, you must register by 31 January 2022.

Trusts liable for other taxes

You must register by 31 January in the tax year after the one in which the trust (your trust) is liable for any of the following:

Inheritance Tax

Stamp Duty Land Tax or Land and Buildings Transaction Tax in Scotland

Stamp Duty Reserve Tax

You must register by the earlier deadline if your trust is liable for more than one tax and both deadlines apply.

How to register

How you register a trust depends on whether you’re:

a trustee

an agent registering a trust for a client

There’s a different process if you need to register an estate of someone who’s died.


Make and serve a statutory demand, or challenge one

When you can make a statutory demand

You can make a statutory demand to ask for payment of a debt from an individual or company.

Anyone who’s owed money (the ‘creditor’) can make a statutory demand. You do not need a lawyer.

If the debt (a debt)’s over 6 years old, you cannot usually make a statutory demand. You can get legal advice instead.

There may be faster ways of getting smaller debts paid than making a statutory demand.

When the individual or company that owes you money (the ‘debtor’) receives a statutory demand, they (an individual or company) have 21 days to either:

pay the debt (a debt)

reach an agreement to pay

You can apply to bankrupt your debtor (an individual or company) or close (‘wind up’) their (an individual or company) company if they (an individual or company) do not respond to the statutory demand (a statutory demand) within 21 days.

Statutory demand forms

Choose the form you need, fill it in and deliver (‘serve’) it to the individual or company that owes you money (an individual or company).

You do not need to send a separate letter.

Serve a demand on an individual (including partners in a partnership)

Which form you need depends on whether you’re collecting a debt that’s:

payable now

payable now following a judgment or court order

payable in the future, if you think they (an individual or company) will not be able to pay the debt (a debt) when they (an individual or company) need to

If you’re serving a demand on a business partnership, you need to download and fill in a form for each partner.

Serve a demand on a limited company

Use statutory demand form SD 1.

If you’re in Scotland

You must use a different form to make a statutory demand in Scotland.

How to serve a statutory demand

You must deliver (‘serve’) the statutory demand form (the form you need) by:

giving it (the form you need) to the individual who owes you money (you should try all their known addresses)

leaving it (the form you need) at the registered office of the company or partnership that owes money (or the main place of business if they do not have a registered office)

giving it (the form you need) to the company’s (the company or partnership that owes money) director, company secretary, manager or principal officer

get a ‘process server’ to serve it (a statutory demand) for you (a solicitor can arrange this)

You can only send it (a statutory demand) by registered post or put it (the form you need) through a letterbox if it (a statutory demand) cannot be delivered in person.

Records you must keep

You must keep a copy of the statutory demand (a statutory demand) and anything that confirms:

the time and date you served the statutory demand (a statutory demand), for example a postage receipt or confirmation from your process server

the debtor has received the statutory demand (a statutory demand)

You’ll need this information if your demand (a statutory demand) is ignored.

If your demand (a statutory demand) is ignored

If your debtor does not pay the debt or agree to your statutory demand (a statutory demand) within 21 days, you can:

start bankruptcy proceedings against any individuals who owe you £5,000 or more

wind up a company that owes you £750 or more

You have 4 months to apply to bankrupt or wind up your debtor. If you’re late, explain why to the court named on the statutory demand (a statutory demand).

Serve a statutory demand abroad

Get legal help if you want to serve a statutory demand in another country.

You need to serve a statutory demand according to local laws but also according to the UK rules.

Challenge a statutory demand

If you do not agree with a statutory demand you’ve been given, you can apply to challenge it and get it ‘set aside’.

You can be made bankrupt or your company wound up if you ignore a statutory demand.

You must apply to the court named on your statutory demand (the court named on the statutory demand (a statutory demand)). Contact a solicitor or your nearest county court if you’re not sure where to send your application.

You cannot challenge a statutory demand if it was served on a company. You can apply to stop your creditors from winding up your company instead.

Any bankruptcy petitions the creditor has already filed against you will usually be suspended until the court reaches a decision.

The court will not usually set aside a statutory demand if it was served on you following the judgment of another court unless, for example:

you think the creditor owes you the same amount as your debt, or more

the amount on the statutory demand (a statutory demand) is secured

Deadlines

You must apply to challenge the statutory demand (a statutory demand) within either:

18 days if you were in the UK (UK) when you got the statutory demand (a statutory demand)

21 to 34 days if you were in another country when you got the statutory demand (a statutory demand) - check the table of countries for specific deadlines

If the deadline is during a weekend or on a bank holiday, you have until the next day the court is open to apply.

You might be able to get an extension in some circumstances - contact the court to find out what these are.

How to apply

Download and fill in form IAA.

Make 3 copies of the completed form and either post them to the court named on your statutory demand (the court) or give them to the court in person.

What happens next

You’ll usually hear back from the court within 10 working days of applying.

If the court does not agree with your application, it (the court) can give the creditor permission to issue a bankruptcy petition against you.

If the court agrees with your application, your case will be passed on to a bankruptcy registrar. They’ll look at your case and arrange a hearing.

What happens at the hearing (a hearing)

Both sides will present their case (your case) to a registrar or judge. They’ll either make a decision then, or ask you and the other party to give more evidence at another hearing.

You’ll usually get a decision at the end of the final hearing.

If you win your case, you’ll get an order from the court setting aside the statutory demand (a statutory demand). The deadline for paying the debt will be suspended.

If you lose, you’ll have to pay back your debt (the debt) within the 21 day time limit. The creditor can apply to bankrupt you if you do not pay in time and your debt is £5,000 or more.

Do not go to court if you have coronavirus (COVID-19) symptoms or if you’re self-isolating or in quarantine. Tell the court if you cannot attend.

Contact the Insolvency Service

Use the contact form to contact the Insolvency Service about delivering and challenging a statutory demand.

You cannot currently contact the Insolvency Service by telephone because of coronavirus (COVID-19).


If you cannot pay your tax bill on time

What to do

You must arrange to pay your tax bill with HM Revenue and Customs (HMRC) if you either:

miss a payment

know you cannot pay on time

If you pay a tax bill late you must pay interest on the amount you owe until it’s paid off. You can avoid penalties by arranging a payment plan with HMRC (HM Revenue and Customs (HMRC)) before the tax (your tax bill) is due  – or by 1 April for Self Assessment.

If you owe Self Assessment tax and your bill (your tax bill) is less than £30,000 you may be able to pay in monthly instalments.

For any other bills or problems paying, you must contact HMRC (HM Revenue and Customs (HMRC)) to discuss your options. How you contact HMRC (HM Revenue and Customs (HMRC)) depends on what you need to pay.

This guide is also available in Welsh (Cymraeg).

If you cannot pay because of coronavirus (COVID-19)

You may be able to pay your Self Assessment tax (Self Assessment tax) in monthly instalments. This includes any delayed (deferred) ‘payments on account’ that were due in July 2020, if you did not pay them at the time.

Contact the HMRC (HM Revenue and Customs (HMRC)) coronavirus (COVID-19) helpline if you cannot pay any other tax bills because of coronavirus (coronavirus (COVID-19)).

If you’re self-employed

If your business has been affected by coronavirus (COVID-19), you may be able to claim a grant through the Self-Employment Income Support Scheme.

If you cannot pay your Self Assessment tax bill

You can set up a payment plan online to spread the cost of your latest Self Assessment bill if:

you owe £30,000 or less

you do not have any other payment plans or debts with HMRC (HM Revenue and Customs (HMRC))

your tax returns are up to date

it’s less than 60 days after the payment deadline

You do not need to contact HMRC (HM Revenue and Customs (HMRC)) if you set up a payment plan.

Call the Self Assessment helpline (the HMRC (HM Revenue and Customs (HMRC)) coronavirus (COVID-19) helpline) if you’re not eligible for a payment plan or cannot use the online service.

If you cannot pay other taxes

You might be able to set up a Time to Pay Arrangement with HMRC (HM Revenue and Customs (HMRC)) if you’re unable to pay any other taxes in full. This lets you spread the cost of your tax bill by paying what you owe in instalments.

How you do this (a Time to Pay Arrangement with HMRC (HM Revenue and Customs (HMRC))) depends on whether you’ve received a payment demand.

If you’ve received a payment demand, like a tax bill or a letter threatening you with legal action, call the HMRC (HM Revenue and Customs (HMRC)) office that sent you the letter.

If you’ve not received a bill or letter, call the Payment Support Service (PSS).

Nominated partners in business partnerships can negotiate a Time to Pay Arrangement with HMRC (HM Revenue and Customs (HMRC)) on behalf of the partnership or individual partners.

Before you contact HMRC (HM Revenue and Customs (HMRC))

You’ll need to know:

your reference number (for example, your 10-digit Unique Taxpayer Reference or VAT reference number)

the amount of the tax bill you’re finding it difficult to pay and the reasons why

what you’ve done to try to get the money to pay the bill (the tax bill)

how much you can pay immediately and how long you may need to pay the rest

your bank account details

What happens when you contact HMRC (HM Revenue and Customs (HMRC))

HM Revenue and Customs (HMRC) will ask you about:

your income and expenditure

your assets, like savings and investments

what you’re doing to get your tax payments back in order

HMRC (HM Revenue and Customs (HMRC)) will decide whether you should be able to pay immediately. If you cannot, they (HM Revenue and Customs (HMRC))’ll decide whether you’ll be able to get your payments back on track with more time.

You’ll be asked more in-depth questions if you’ve been given more time to pay before. In more complex cases HMRC (HM Revenue and Customs (HMRC)) may ask for evidence before they (HM Revenue and Customs (HMRC)) make a decision.

What happens next

You’ll have to pay immediately if HMRC (HM Revenue and Customs (HMRC)) think you can when you call. You can pay by Direct Debit, corporate credit card or debit card over the phone.

You’ll be charged a fee if you pay by credit card. The fee is not refundable.

If you cannot pay all your tax bill, you may be able to:

pay your bill in instalments by Direct Debit

get more time to pay

When you might get more time to pay

HMRC (HM Revenue and Customs (HMRC)) may offer you extra time to pay if they (HM Revenue and Customs (HMRC)) think you genuinely cannot pay in full now but will be able to pay in the future.

You can set up a plan to pay in instalments by Direct Debit on dates they (HM Revenue and Customs (HMRC)) agree with you.

Tell HMRC (HM Revenue and Customs (HMRC)) as soon as possible if your circumstances change and you can pay your tax bill faster.

You’ll have to pay interest on the amount you pay late.

You must keep these payments up to date and pay your other tax. If you do not, HMRC (HM Revenue and Customs (HMRC)) will normally cancel the arrangement and take legal action against you straight away.

When you will not get more time to pay

If HMRC (HM Revenue and Customs (HMRC)) do not think you can get your payments on track with more time, they (HM Revenue and Customs (HMRC)) will not make an arrangement with you - they (HM Revenue and Customs (HMRC))’ll expect you to pay your tax bill straight away.

If you do not, HMRC (HM Revenue and Customs (HMRC)) will start ‘enforcement action’ to get the money from you.

Help and advice

The Money Advice Service has more information about debt management and where you can get free debt advice.

You can also contact HMRC (HM Revenue and Customs (HMRC)).

Making a complaint

You cannot appeal against HMRC’s (HM Revenue and Customs (HMRC)) decision, but you can make a complaint if you’re unhappy about how you were treated.


Claim tax relief for your job expenses

Overview

You might be able to claim tax relief if:

you use your own money for things that you must buy for your job

you only use these things (things that you must buy for your job) for your work

You cannot claim tax relief if your employer either gives you:

all the money back

an alternative, for example your employer gives you a laptop but you want a different type or model

This guide is also available in Welsh (Cymraeg).

You must have paid tax in the year. You’ll get tax relief based on what you’ve spent and the rate at which you pay tax.

For some claims, you must keep records of what you’ve spent. You must claim within 4 years of the end of the tax year (the year) that you spent the money.

If your claim is for the current tax year, HM Revenue and Customs (HMRC) will usually make any adjustments needed through your tax code.

If your claim is for previous tax years, HMRC (HM Revenue and Customs (HMRC)) will either make adjustments through your tax code or give you a tax refund.

Check if you can claim

Working from home

You may be able to claim tax relief for additional household costs if you have to work at home on a regular basis, either for all or part of the week. This includes if you have to work from home because of coronavirus (COVID-19).

You cannot claim tax relief if you choose to work from home.

You may be able to claim tax relief for:

gas and electricity

metered water

business phone calls, including dial-up internet access

You cannot claim for the whole bill, just the part that relates to your work.

You may also be able to claim tax relief on equipment you’ve bought, such as a laptop, chair or mobile phone.

How much you can claim

You can either claim tax relief on:

£6 a week from 6 April 2020 (for previous tax years the rate is £4 a week) - you will not need to keep evidence of your extra costs

the exact amount of extra costs you’ve incurred above the weekly amount - you’ll need evidence such as receipts, bills or contracts

You’ll get tax relief based on the rate at which you pay tax. For example, if you pay the 20% basic rate of tax and claim tax relief on £6 a week you would get £1.20 per week in tax relief (20% of £6).

Check if you can claim

Uniforms, work clothing and tools

You may be able to claim tax relief on the cost of:

repairing or replacing small tools you need to do your job (for example, scissors or an electric drill)

cleaning, repairing or replacing specialist clothing (for example, a uniform or safety boots)

You cannot claim relief on the initial cost of buying small tools or clothing for work.

Personal Protective Equipment (PPE)

You cannot claim tax relief for PPE (Personal Protective Equipment (PPE)). If your job requires you to use PPE your employer should either:

give you PPE (Personal Protective Equipment (PPE)) free of charge

ask you to buy it (Personal Protective Equipment (PPE)) and reimburse you the costs

How much you can claim

You can either claim:

the actual amount you’ve spent - you’ll need to keep receipts

an agreed fixed amount (a ‘flat rate expense’ or ‘flat rate deduction’)

Check if your job has an agreed flat rate expense.

Check if you can claim

Vehicles you use for work

You may be able to claim tax relief if you use cars, vans, motorcycles or bicycles for work.

This (use) does not include travelling to and from your work, unless it’s a temporary place of work.

How much you can claim depends on whether you’re using:

a vehicle that you’ve bought or leased with your own money

a vehicle owned or leased by your employer (a company vehicle)

Using your own vehicle for work

If you use your own vehicle or vehicles for work, you may be able to claim tax relief on the approved mileage rate. This covers the cost of owning and running your vehicle. You cannot claim separately for things like:

fuel

electricity

road tax

MOTs

repairs

To work out how much you can claim for each tax year you’ll need to:

keep records of the dates and mileage or your work journeys

add up the mileage for each vehicle type you’ve used for work

take away any amount your employer pays you towards your costs, (sometimes called a ‘mileage allowance’)

Approved mileage rates

| First 10,000 business miles in the tax year | Each business mile over 10,000 in the tax year

Cars and vans | 45p | 25p

Motorcycles | 24p | 24p

Bicycles | 20p | 20p

Using a company car for business

You can claim tax relief on the money you’ve spent on fuel and electricity, for business trips in your company car. Keep records to show the actual cost of the fuel.

If your employer reimburses some of the money, you can claim relief on the difference.

Check if you can claim

Professional fees and subscriptions

You can claim tax relief on:

professional membership fees, if you must pay the fees to be able to do your job

annual subscriptions you pay to approved professional bodies or learned societies if being a member of that body or society is relevant to your job

You cannot claim tax relief on life membership subscriptions, or for professional membership fees or annual subscriptions you:

have not paid yourself (for example if your employer has paid for them)

have paid to professional organisations that are not approved by HMRC

Your organisation can tell you how much tax you’re allowed to claim back.

Check if you can claim

Travel and overnight expenses

If you have to travel for your work you may be able to claim tax relief on the cost or money you’ve spent on food or overnight expenses.

You cannot claim for travelling to and from work, unless you’re travelling to a temporary place of work.

You can claim tax relief for money you’ve spent on things like:

public transport costs

hotel accommodation if you have to stay overnight

food and drink

congestion charges and tolls

parking fees

business phone calls and printing costs

You may also be able to claim tax relief on business mileage.

Check if you can claim

Buying other equipment

In most cases you can claim tax relief on the full cost of substantial equipment, for example a computer, you have to buy to do your work. This is because it qualifies for a type of capital allowance called annual investment allowance.

You cannot claim capital allowances for cars, motorcycles or bicycles you use for work, but you may be able to claim for business mileage and fuel costs.

You claim in a different way for small items that’ll last less than 2 years, such as uniforms and tools.

You can only claim tax relief for equipment expenses if:

you need it to do your job

you use the equipment for work and there’s no significant private use - this includes using the equipment according to your organisation’s policy

If your employer gives you money for the item

Reduce the amount you claim tax relief on by the amount of money your employer gives you.

Check if you can claim