Year End Tax Planning
It s not very long before the ending of the tax year draws near. It is so important to make use of any allowances and tax breaks that are .
By using the exemptions and allowances you might possibly bring down your tax bill substantially. This can normally be done quick and easily with the advice of an ifa.
Tax effective investments
Individual savings accounts
Individual Savings Accounts (ISAs). If you are aged over fifty your Isa allowance for the actual 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 investment vehicles that can be used
Pensions
Pensions are also a tax efficient way of saving for retirement. Most individuals can contribute up to three thousand six hundred pounds gross each year and obtain basic rate tax relief on the contribution made. 40% taxpayers can claim the residue on their self assessment.
Capital Gains Tax Opportunities
If you have made profits on certain types of investment you may be able to use your yearly capital gains tax allowance. This will allow you to make gains up to this amount without getting a liability to pay tax. In many examples it is also possible to carry forward past year’s losses.
Income Tax Opportunities
Each person can have a personal allowance of 6475 without acquiring any income tax. For married couples or civil partnerships, where one is a higher rate taxpayer it is worth 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 reducing your liability to income tax.
Saving Inheritance Tax
Every Person can give an IHT exempt gift each year of up to £3000 in a tax yr. Any unused allowance can be carried forward for 1 year only. If you are able to make gifts out of income without it affecting your standard of living you may be able to make gifts over the annual exemption limit.
If you believe your estate could be in excess of the IHT nil rate band then effective tax planning can be utilized to cut your estates potential inheritance liability. This could include a appropriately drafted will or instead trust provision.
Consilium Asset Management are Independent Financial Advisors based in Chipping Sodbury South Gloucestershire.
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