(This page has been written with non-U.K. residents in mind; if you are in the U.K. you may find the standard version of this page more useful. Same links and basic content, just a different slant.)
Tax Cafe Books
Tax Cafe is a specialist book publisher on the subject of UK Tax. They concentrate on what they know and do it well. I was so impressed I asked to be an affiliate: I knew I'd be telling people about them anyway! Each book is packed with detail, is kept up to date (some of the books make educated guesses about future government budgets, to make them fairly future proof) and are surprisingly easy to read. The downside is that they are a little pricier than alternative books, at £25. Of course, that won't even buy you an hour with an accountant, and the knowledge you gain should save you many times that.
As a bonus, each book comes with the same content on PDF (which you receive immediately). I've personally tested the PDFs on both kindle and android smartphone, and they are very readable on both devices. As another bonus you get another free e-book, How to Save Tax. P&P is £1.95 however many books you buy (and is the same for overseas orders)!
The books generally take a holistic view, for instance they warn you with cases where people save a small amount on stamp duty only to then be hit with a much higher VAT bill. Or cases where a person tries to avoid inheritance tax in the future but in return end up with a capital gains tax bill that has to be paid today. That is the kind of advice even your accountant might not give you unless you already know the right questions to ask.
If you want another reason you should buy books such as this, it is what Robert Kiyosaki (best-selling author of the Rich Dad books) calls financial intelligence. Awareness of how tax works, what your options are, when and why to use companies, tax havens, etc. should be in your mind before your start any kind of business planning. If you are asking the question: "I've just got an unexpected £10,000 CGT bill, what can I do about it?" then it is already too late.
My purpose with this page is to introduce the books that are of most interest to me, in the hope they will also be of interest to you! I've tried to introduce each and give you an idea of which book you want to answer the questions you have. I've also included some additional information of my own, where appropriate.
How To Avoid Property Tax
By Carl Bayley
We've all heard that property is a future-proof pension, and possibly the only pension you can rely on in the future. There are numerous books out there on that theme and how to get rich with buy-to-let and all its variations, and they all include a section or a chapter on tax. And in that short chapter they all say, "But talk to your accountant [to learn what you should actually do]." This book is the only one I know of that does not: it is all about the tax aspect of property purchasing, whether you are buying for income or for capital gain.
The advice in this book is the kind of thing you really need to know before buying your first property, but certainly before your second property. It starts with a discussion of different types of property investors, then has two chapters on income tax and one on capital gains tax. It then has a chapter on tax on transactions, and another chapter on stamp duty, VAT and national insurance. Surely that has answered all your questions? But if you have questions like "How does divorce affect things?", "Holiday lets?", "Hotels?" then you want the Advanced Tax Planning chapter.
If your questions are about using a property company, or similar vehicle, rather than trading as an individual, the final chapter touches on that, but in that case you really want to read a different book Using A Property Company To Save Tax.
Using A Property Company To Save Tax
By Carl Bayley
This book covers similar ground to How To Avoid Property Tax, but from the point of view of a company rather than an individual. It has two purposes, the first being to tell you if a company is right for you, or if you are better of as a sole trader. And then to tell you how to use the company to minimize the tax you have to pay.
In addition to the topics you'd expect (different types of property company, corporation tax, capital gains, stamp duty, VAT, etc.) it also covers furnished lets and holiday cottages, how to put existing property into a company in the best way and the dangers of private use. There is a chapter on how you go about setting up the company, and an important chapter on interest relief (which they describe as one of the most important benefits of using a property company).
Using A Company To Save Tax
By Lee Hadnum LLB ACA CTA
This is a relatively short guide, at 128 pages. It shows the pros and cons of using a company, mainly from the point of view of tax savings. Other reasons to use a company are touched upon. The author points out the the limited liability advantage is actually fairly theoretical, and that as a director of a small or one-person company you will be just as liable for the debts as you would as a sole trader.
The discussion is generic; if your interest is in a company for conducting a property business, then you instead want Using A Property Company To Save Tax.
The book is up to date, including March 2011 budget changes. But personally I find it a bit pricey when the other guides have twice the number of pages for the same price. Of course I'm not saying I want it padded out with fluff. But I'd prefer to see it priced lower (even as an affiliate earning a percentage ;-).
The Investor's Tax Bible
By Lee Hadnum LLB ACA CTA
The thing I like about this book is it focuses on increasing your after-tax wealth, not on simply avoiding tax. After all if not paying tax was your goal, then not earning any money is the simple solution.
For the stock investor it covers stocks, options, warrants, unit trusts, takeovers, rights issues, investment trusts, spreading betting and CFDs. Anything it doesn't cover? I don't think so! By the way, speaking as a trader rather than an accountant, be careful with spread betting; the spreads on offer can be worse than the equivalent CFD or stock, which can more than offset the tax advantages if you are trading actively.
ISAs are well-covered, as well as how to use family members to best advantage. (Use sounds cruel, but you know what I mean.)
One minor downside to this book is that it is now 18 months old. Not a fatal flaw, but it does mean there have been three budgets since then (the book contains all tax changes from the June 2010 budget, and tries to second guess future changes). My guess is the 10th edition will be released in Autumn 2012, so I also don't recommend waiting, unless you are still at the stage of thinking about thinking about investing (or you are reading this is summer 2012)!
Non-Resident & Offshore Tax Planning
By Lee Hadnum LLB ACA CTA
The main theme of this book is how to avoid U.K. income tax, U.K. capital gains tax, and U.K. inheritance tax by living outside the U.K. It highlights various traps and pitfalls. Also useful for people planning to return to the U.K. to help you understand what you might want in place beforehand.
It covers offshore trusts and companies, and owning U.K. property (directly or using a trust or company). It also covers and foreign property ownership. Finally it covers double tax treaties (something I've dealt with living in Japan - the sums get horribly complex, and I normally get passed from expert to expert at the tax office until we find one who understands it).
The World's Best Tax Havens
By Lee Hadnum LLB ACA CTA
The first 100 pages (of this 240 page book) introduce the 30+ tax havens around the world. If you've been moaning about your taxes, and hear stories of the rich and famous leaving to escape high taxation, you may be surprised to discover the U.K. is listed. Japan is most definitely not listed.
The book also describes the three types of tax haven. First there are nil-tax havens. They tend to be exotic places with beautiful beaches; don't ask me why. The second type are those where money earnt outside the country is exempt of tax. Hong Kong and Singapore are to Asian examples. The third type are simply those with low tax rates; that could get a bit subjective, but the book nicely explains how they can save you money.
Miscellaneous
If you have found this page useful and decide to buy one of the books, please do follow the link on this page. There is no catch, it costs you nothing extra, but it gives me a little income to compensate for the time spent preparing this page and keeping it up to date. I don't get to see any of your personal information; the transaction is solely with Tax Cafe Books.
Tax calculator photo thanks to Philip Ingham. Book cover photos copyright Tax Cafe.