It s not long before the ending of the tax year nears. It is important to make the most of any personal allowances and tax breaks that are available.
By using the allowances and annual exemptions you will reduce your tax charge considerably. This can usually be done promptly and easily with the help of a financial adviser.
Tax effective investments
Individual savings accounts
Individual Savings Accounts (ISAs). If you are aged over 50 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 a regular income and are one of the most tax efficient investment vehicles obtainable
Pensions
Pensions are also a tax efficient way of planning for retirement. Most people can pay up to three thousand six hundred pounds gross each yr 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 gains on certain types of investment you may be able to use your annual capital gains tax allowance. This will let you to make gains up to this amount without acquiring a liability to pay tax. In many cases it is also possible to carry forward previous year’s losses.
Income Tax Planning
Each person can receive a personal allowance of £6475.00 without acquiring any income tax. For wedded pairs or civil partnerships, where one is a forty percent taxpayer it is worth looking to see who owns the investment and possibly 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.
Saving IHT
Every individual 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 yr only. If you are capable to make gifts out of income without it changing your standard of living you might be allowed to make gifts over the annual exemption limit.
If you believe your estate could be above the Inheritance Tax nil rate band then efficient tax planning can be utilized to cut back your estates likely inheritance tax liability. This could include a suitably drafted will or instead trust planning.
Consilium Asset Management are IFA s based in Chipping Sodbury, Bristol.
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