End of Year Tax Reduction Plans
its not very long before the close of the tax year nears. It is crucial to make the most of any personal allowances and tax breaks that are available.
By using the annual exemptions and allowances you could potentially bring down your tax bill considerably. This can usually be done quick and easily with the assistance of an ifa.
Tax effective investments
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 a regular income and are one of the most tax efficient investments obtainable
Pensions
Pensions are also a tax efficient way of saving for retirement. Most individuals can pay up to £3600 gross each twelvemonth and obtain basic rate tax relief on the payment made. 40% taxpayers can claim the remainder on their self assessment.
Capital Gains Tax Opportunities
If you have made gains on certain types of investments you may be able to use your yearly capital gains tax allowance. This will let you to make gains up to this threshold without receiving a liability to tax. In many cases it is also viable to carry forward past year’s losses.
Income Tax Opportunities
Each individual can receive a personal allowance of 6475 without incurring any income tax. For married couples or civil partnerships, where one is a forty percent taxpayer it is worthwhile looking to see who owns the investment and potentially look to transfer assets into the
BR taxpayers name.Making gifts is also a way of reducing your liability to income tax.
Inheritance Tax opportunities
A person can give an IHT exempt gift each year of up to £3000 in a tax twelvemonth. Any unused exemption can be carried ahead for 1 yr only. If you are capable 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 in excess of the Inheritance Tax nil rate band then effective tax planning can be utilized to cut back your estates potential inheritance tax liability. This could be a appropriately drafted will or instead trust provision.
Consilium Asset Management are Financial Advisors based in Bristol, South Gloucestershire.
If you are a ifa we have established Financial Vision. Financial Vision supplies an IFA website design service to the financial services industry.
