Year End Tax Advice
It s not long before the close of the tax year approaches. It is vital to make use of any allowances and tax breaks that are useable.
By using the exemptions and allowances you might bring down your tax charge substantially. This can usually be done quickly and easily with the assistance of an independent financial adviser.
Tax effective investing
Individual savings accounts
Individual Savings Accounts (ISAs). If you are aged over 50 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 income and are one of the most tax efficient investment vehicles available
Pensions
Pensions are also a tax efficient way of saving for retirement. Most individuals can pay up to £3,600 gross each yr and obtain basic rate tax relief on the contribution. Higher rate taxpayers can claim the balance on their self assessment.
Capital Gains Tax Opportunities
If you have made profits on certain types of investments you may be able to use your yearly capital gains tax allowance. This will enable you to make gains up to this level without getting a liability to pay tax. In some cases it is also viable to carry forward previous year’s losses.
Income Tax Opportunities
Each individual can receive a personal allowance of £6475.00 without incurring any income tax. For married couples or civil partnerships, where one is a 40% taxpayer it is worth looking to see who owns the investment and possibly look to transfer assets into the
BR taxpayers name.Making annual gifts is also a means of cutting your liability to income tax.
Saving Inheritance Tax
An individual can make an IHT exempt gift each year of up to £3000 in a tax twelvemonth. Any unused exemption can be carried forward for 1 year only. If you are capable to make gifts out of income without it affecting your standard of living you may be allowed to make gifts over the yearly exemption limit.
If you believe your estate could be over the Inheritance Tax nil rate band then good tax planning can be employed to cut your estates potential inheritance liability. This could be a appropriately drafted will or alternatively trust provision.
Consilium Asset Management are Financial Advisers based in Chipping Sodbury, Bristol.
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