Year End Tax Planning
its not long before the close of the tax year nears. It is vitally important to make the most of any personal allowances and tax breaks that are obtainable.
By using the annual exemptions and allowances you might be able to reduce your tax bill substantially. This can ordinarily be done promptly and easily with the help of a financial advisor.
Tax effective investing
Individual savings accounts
Individual Savings Accounts (ISAs). If you are aged over fifty your Isa allowance for the present tax year is now £10,200. ISA’s are free from capital gains tax, can be used to provide an income and are one of the most tax efficient investment vehicles obtainable
Pensions
Pensions are also a tax efficient way of saving for retirement. Most people can contribute up to three thousand six hundred pounds gross each year and obtain basic rate tax relief on the contribution. Forty percent taxpayers can claim the residual on their self assessment.
Capital Gains Tax Planning
If you have made profit on certain types of investment you may be able to use your annual capital gains tax allowance. This will enable you to make gains up to this amount without getting a liability to tax. In many examples it is also viable to carry forward previous year’s losses.
Income Tax Planning
Each individual can have a personal allowance of £6475.00 without acquiring any income tax. For wedded couples or civil partnerships, where one is a 40% taxpayer it is worth looking to see who owns the investments and potentially look to transfer assets into the
BR taxpayers name.Making gifts is also a means of keeping down your liability to income tax.
Inheritance Tax opportunities
An individual can give an IHT exempt gift each year of up to Three thousand pounds in a tax yr. Any unused allowance can be carried ahead for 1 year only. If you are able to make gifts out of income without it affecting your standard of living you might be allowed to make gifts above the yearly exemption limit.
If you think your estate could be over the IHT nil rate band then good tax planning can be utilized to bring down your estates future inheritance liability. This could be a suitably drafted will or alternatively trust planning.
Consilium Asset Management are Financial Advisors based in Chipping Sodbury, Bristol.
If you are a independent financial advisor we have set up Financial Vision. Financial Vision supplies an IFA web site design implementation service to the financial services industry.
