Uk Capital Gains Tax – What You Need To Know To Avoid It!

What is CGT?

Capital gains tax (‘CGT’) is the tax that you pay when you sell an asset. So if you sell property, or an investment you’ll need to consider CGT. In fact anything that you don’t hold for the purposes of a trade (ie that you’ve not bought to sell) will be within the scope of CGT.

Any gain that you make is then taxed depending on the rate of income tax that you pay. So if you’re a 40% taxpayer you’ll pay CGT on the gain at 40%. If you are a basic rate taxpayer you’ll pay CGT at 20% on the gain within your remaining basic rate tax band, and 40% on the excess.

OK – this is pretty straightforward, but based on the above the scope of CGT is huge! (as it covers any objects that you didn’t purchase to sell on). Well, this is correct it does have a very wide scope but the interesting bit is that there are lots of exemptions that take assets out of the scope of CGT. We’ll have a quick look at these so you can see what you can sell without having to account for CGT.

The exemptions from Capital Gains Tax

Your own Home

As most of you will probably know, an investment in your own home is free of capital gains tax, (and income tax as well for that matter).

Chattels which are wasting assets

There is a blanket capital gains tax exemption for ‘tangible moveable property’ that is also classed as a wasting asset.

In general terms if an asset has a predictable life of less than fifty years it is exempt from capital gains tax. An item of machinery is regarded as having a predictable life of less than fifty years and therefore they will usually be a wasting asset.

Therefore many assets that have an element of machinery should in principle be exempt (for example antique clocks and watches)

Gambling winnings

Anything you make from Gambling is received totally tax free. So there’s no capital gains tax, and there will not also be any income tax or national insurance due

Personal compensation or damages

Most forms of compensation will be exempt from capital gains tax

Motor cars

There is a capital gains tax exemption for ‘normal motor cars’

Debts

There is an exemption under capital gains tax for a disposal of a debt by the original creditor

Chattels worth less than £6,000

Even if you have tangible moveable property that does not qualify as ‘wasting’ assets there should be a capital gains tax exemption available if the proceeds are under £6,000.

The annual capital gains tax exemption

It’s also well worth noting that everybody has an annual capital gains tax exemption (currently £9,200) that is available to cover capital gains. So if your gain is less than this there’s no capital gains tax to pay in any event (this means that a couple could purchase an asset jointly and later sell it eliminating profits of £18,400 due to the two annual exemptions).

This should give you a few pointers on which assets you can sell without incurring capital gains tax. We cover all of these and more in detail via our website http://www.wealthprotectionreport.co.uk

Breaking the Bondage of Addiction

Addictions today have become more common than we dare to accept. Many types of addictions have become socially acceptable, in these morally and spiritually bankrupt times. Good things when misused can turn into addictions.

What is Addiction?

It is dependency on a particular substance or behaviour which is impossible to break without timely intervention. It destroys the person, demoralizes the family and all those associated with him.

Society has a general tendency to consider different kinds of substance abuse as addiction, while ignoring certain behaviour patterns that are equally addictive. Food, shopping, gambling, work, or sex can turn to behaviour addictions and create problems that are just as destructive as substance abuse.

• Workaholics would be shocked if told that work has become their addiction. They believe that frenetic activity is good for mental health and wellbeing. People want to carve out positions of power and honour through their professional accomplishments. What starts as a worthy ambition soon grows into an addiction. Without work they feel enervated and depressed.

• Food becomes an emotional pacifier to satisfy longings, loneliness or low self esteem. People eat when under stress. The act of digesting the food switches off that part of the brain mechanism that makes them tense. The rise of serotonin when food is taken makes them feel good. Those who live alone and are sad or depressed are vulnerable. One woman who was eating all the time said, “I miss my husband, and my stomach does not know the difference between hunger and love.” Frenzy feeding is an addiction. It is a vicious cycle. When a depressed person snacks, his blood sugar rises and he feels good. But insulin shoots up in the blood and after a while, blood sugar falls. So he feels depressed again and reaches for a hot chocolate or a cookie.

• Gambling: Lotteries, playing cards, number games, casino games, betting at the races or even cricket matches and other sporting events can become addictive. Even losing money doesn’t deter them. They believe that luck is just around the corner. The adrenaline rush overshadows the guilt of money lost and debts piling up.

• Shopaholics are compulsive buyers. Whenever they are angry or frustrated, they find release in purchasing a pair of shoes or an expensive dress, irrespective of the money and time wasted. It makes them snap out off their moods.

• Relationships: Some people develop an over dependence on a particular person to make them feel complete or fulfilled. This may lead to stalking, threatening or harming the very person they claim to love.

• Sexual addiction is when the need for sex becomes a compulsive obsession whether marital, extramarital or same sex. 44% of sex addicts are embarrassed by what they do, but can’t help themselves nor will they seek treatment. Fetishes, pornography, rape, frottage (pawing women) flashing, are some of the ways by which they get their orgasm. This addiction is to the neurochemical changes that occur during sex. Sex addiction in women is becoming a major problem.

• Mood altering chemicals like cocaine, heroin, LSD, amphetamines, ketamine, and prescription drugs like cough syrups, sedatives, tranquillizers are habit forming. Even caffeine (one cup of coffee contains 150mgs of caffeine) is addictive. Drugs provide a feeling of well being and a false sense of power and control.

• Alcohol is a threat to modern civilization. With free availability, younger age groups are becoming hooked on alcohol. Alcoholism is said to decrease the life span of a person by twelve years. It is a depressant that affects the central nervous system immediately. No doubt it temporarily reduces tension and brings about relaxation. But in the long run, it destroys a person mentally and physically.

• Smoking is a habit very difficult to kick. It has damaging effects on liver, heart and is implicated in the cause of cancer.

All addictions, whether behavioural or chemical, are destructive. They gradually rob one of will power or self control. With drugs and alcohol, the body becomes tolerant to small amounts. So, larger quantities are needed. Mixing of drugs enhances potency, but also increases dangers. Health deteriorates. There is loss of control and inability to manage one’s affairs. Even routine jobs are difficult to perform. Behaviour becomes erratic.

Causes of Addiction:

1. Friends or family members may introduce the young impressionable teen to a glass of beer or a cigarette. This may be the beginning of a love for these substances. Recently, the case of a brandy guzzling child of five was reported. His parents started giving him brandy every day to ward off asthmatic attacks.

2. Keeping wrong company. Peer pressure can be very persuasive.

3. Disorganized home environment where parents are poor role models. There is no love, warmth or appreciation of a sensitive child. Parents may quarrel frequently or there may be domestic violence.

4. Poor and unsafe neighborhoods where drunkenness, violence and abusive behaviour is a way of life.

5. Lack of direction with no moral standards to live by. Young people can be easily influenced into wrong ways.

6. Glorification of alcohol, drugs and vices through films, TV, advertisements.

7. Easy availability of alcohol and drugs.

How to break the bondage of Addiction:

• By first admitting that one has a problem with either substances or behaviour; that life is fully out of control; that there is loss of dignity.

• By seeking help from trained counselors or psychiatrists. They will help to get to the root of the problem – Injustice? Fear? Worthlessness? Anger? Life is not a bed of roses.

Everybody has problems, but one must learn to deal with them without the aid of substances. It is important to be conscious of one’s vulnerabilities.

• Approach for alcohol and substance abuse is multidisciplinary. It needs admission to a facility dealing exclusively with these problems. Medical measures will involve detoxification and treatment of withdrawal symptoms.

Psychological management will be through:

1. Counseling individually, by which he is psychologically conditioned to stay away from drugs or alcohol. Each member of his family must also cooperate with the addict’s treatment, through love, understanding and compassion.

2. Group therapy will help the addict realize that he is not alone and that there are others in a similar situation. Here there is mutual understanding, acceptance, sharing of individual problems and sympathy.

3. Sociotherapy involves teaching the addict effective methods of adjustment to normal life. He should not be left in a high risk environment. Community reinforcements like recreation clubs, Alcoholics Anonymous, and job availability will be helpful.

Rehabilitation can be a long and hard battle depending on whether the addiction is to a substance or behaviour. It depends on the addict’s desire and determination to be cured, and the support he receives from his loved ones. Relapses may occur. But there must be the will to start all over again. Sometimes it may be a life long struggle especially with drug addicts and alcoholics. Therefore finding support groups is important.

Along with therapy, dependence on God is essential. A daily walk with God will strengthen a person enough to surmount the injustices of life, and dispel lurking fears.

The seeds of addiction are within all human beings. We need to periodically examine ourselves and see if there are things we find difficult to let go, and which have the potential to turn into addictions.

Group Fitness Instructor Liability Insurance

Many people rarely consider the need for professional group fitness instructor liability insurance. It makes sense, however, that in our litigious society precautions should be taken to ensure that those who choose to earn their living as a fitness instructor are protected against legal damages, whether the charges are warranted or not. Most insurance companies will cover actual fitness facilities as well as their employees up to a certain limit and under certain conditions; however it may be only the lowest coverage possible with certain exclusions and conditions. If you are an independent fitness instructor, or even working full time for a fitness facility, it is vital that you consider protecting yourself with a group fitness instructor liability insurance policy.

What is Group Fitness Instructor Liability Insurance?

Group fitness instructor liability insurance protects physical fitness instructors against damages incurred or legal actions brought about by claimants as a result of the instructor’s training duties.

Common reasons for litigation against instructors include:

o Muscle injuries

o Joint injuries

o Back injuries

o Broken bones

o Bruised bones

Most group fitness instructor liability insurance policies will cover the common causes or hazards that can occur during training and result in the losses mentioned above. Common claims include:

o Injury as a result of poor supervision

o Injury as a result of poor training technique and education

o Injury as a result of overtraining

o Injury as a result of lack of adequate stretching or cool down periods

People can also claim mental damages, stress, or humiliation. For this reason it is extremely important that your group fitness instructor liability insurance policy gives you the most specific and comprehensive coverage possible. Although certain endorsements (additional coverage) may add to the total premium that you pay each year, in the end it will be well worth it. Too many frivolous lawsuits are settled in favor of the plaintiff to warrant gambling with your coverage amounts and limits.

Limits of Coverage

As for the limits of coverage, most insurance companies will offer a basic policy with an aggregate limit of $500,000, $1,000,000 or $2,000,000. They may also have a per occurrence limit that is significantly less than the total policy limit. It is important to understand this distinction because if your policy limit is $1,000,000 but your per occurrence limit is only $100,000, this means you are responsible for paying any monies owed to the other party that exceed the $100,000 limit. For example, if the judgment against you is $150,000 and the per occurrence limit is $100,000, you will be responsible for paying the remaining $50,000 out of pocket. If you do not have the $50,000 in cash or savings immediately available for payment, wage garnishment and even asset liquidation can occur.

Conclusion

When considering a group fitness instructor liability insurance policy, remember that it is always best to be over insured and not need it than to be underinsured and end up with a large debt that you will have to end paying for the rest of your life.

Money Management

Money Management deals with the question of how much risk a decision maker should take in situations where uncertainty is present. More precisely the percentage or the part of the decision maker’s wealth should be put into risk in order to maximize the decision maker’s utility function.

Money management also evaluates the reward of a trade and resolves the most functional use of investment money. It declares the number of shares to purchase and how much money to place at risk. It is the distinction between an outstanding trading performance and pitiful performance. It will make the difference between making money and going broke.

Money management gives practical advice among others for gambling–wagering money or something of material value on an event with an uncertain outcome with the primary intent of winning additional money or material goods and for stock trading–buying or selling stock shares.

Money management is also associated with risk management. It is considered definitely crucial to successful trading on an ongoing basis. Many traders look at it as the single most vital element of trading. Indeed, deficient money management is one major cause of bankruptcy among unseasoned traders. There is little doubt that adopting proper money management will lead to more traders being able to attain success, or to avoid devastating failures.

Some traders wrongly perceive that they are managing their money by having money management stops. These stops enable the trader to get out of an event where they lost an inevitable amount of money. However, such kind of stop does not announce the quantity, so it really has nothing to do with money management.

Controlling risk by proclaiming the amount of loss if you are stopped out is not identical to directing risk through a money management model that determines the extent of your problem.

There are many money management strategies that are available. Some are probably more suited to your style of trading than others.

Having said that, there exist two basic systems for money management that we need to be take interest in. These systems were derived from the gambling theory.

The first trading system is the Antimartingale System. It denotes an increase in risk every time one wins and marks a decrease in risk when losing. This system is found to be functional and is often used as basis for most of the money management systems.

The second is the Martingale System. This strategy aggrandizes money at risk during a losing streak. Following a loss, the value of money increments on the next trade. The assumption indicates that one eventually wins after a series of losses.

One of the focuses and main ideas behind money management is to safeguard and maintain a healthy capital so as to enable a person to live to trade another day. Before ever undertaking a trade, the first thing you should consider is the amount of money being risked. The next pondering would involve the extent of loss that one is able to accept and correct. One of the most common mistakes new day traders make is that of putting all of their capital on one or two stocks.

Copyright 2007 Ismael D. Tabije