Annual Tax Planning Opportunities
It s not very long before the end of the tax year nears. It is crucial to make the most of any personal allowances and tax breaks that are useable.
By using the allowances and exemptions you could potentially reduce your tax bill substantially. This can ordinarily be done quickly and easily with the help of a financial adviser.
Tax effective investing
Individual savings accounts
Individual Savings Accounts (ISAs). If you are aged over fifty your Isa allowance for the current tax year is now £10,200. ISA’s are free from capital gains tax, can be used to provide an annual income and are one of the most tax efficient investments obtainable
Pensions
Pensions are also a tax efficient way of planning for retirement. Most people can pay in up to three thousand six hundred pounds gross each tax year and obtain basic rate tax relief on the payment made. Higher rate taxpayers can claim the residual on their self assessment.
Capital Gains Tax Opportunities
If you have made profit on certain types of investments you may be able to use your yearly capital gains tax allowance. This will allow you to make gains up to this amount without acquiring a liability to tax. In some examples it is also possible to carry forward past year’s losses.
Income Tax Opportunities
Each individual can receive a personal allowance of £6475.00 without acquiring any income tax. For wedded couples or civil partnerships, where one is a higher rate taxpayer it is worthwhile looking to see who owns the investment and potentially look to transfer assets into the
20% twenty percent taxpayers name.Making annual gifts is also a way of keeping down your liability to income tax.
Inheritance tax (IHT) planning
Every individual can make an IHT exempt gift each year of up to 3,000 in a tax year. Any unused exemption can be carried forward for one year only. If you are capable to make gifts out of income without it altering your standard of living you may be allowed to make gifts over the yearly exemption limit.
If you consider your estate could be over the Inheritance Tax nil rate band then good tax planning can be utilized to cut your estates likely inheritance tax liability. This could include a suitably drafted will or instead trust planning.
Consilium Asset Management are Financial Advisors based in Bristol.
If you are a independent financial adviser we have established Financial Vision. Financial Vision provides an IFA website design service to the financial service industry.
