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It s not long before the ending of the tax year nears. It is essential to make the most of any allowances and tax breaks that are available.
By using the allowances and annual exemptions you might be able to reduce your tax bill substantially. This can commonly be done quick and easily with the assistance of an ifa.
Tax effective investing
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 income and are one of the most tax efficient investment products that can be used
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 contribution. 40% 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 incurring a liability to tax. In many examples 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 espoused pairs or civil partnerships, where one is a forty percent taxpayer it is worth looking to see who owns the investments and potentially look to transfer assets into the
basic rate taxpayers name.Making annual gifts is also a way of reducing your liability to income tax.
IHT planning
Each individual can make an IHT exempt gift each year of up to Three thousand pounds in a tax year. Any unused allowance can be carried forward for one year only. If you are capable to make gifts out of income without it changing your standard of living you may be allowed to make gifts over the annual exemption limit.
If you think your estate could be in excess of the Inheritance Tax nil rate band then good tax planning can be used to cut your estates potential inheritance liability. This could be a appropriately drafted will or instead trust planning.
Consilium Asset Management are Financial Advisors based in Chipping Sodbury, Bristol, South Gloucestershire.
If you are a ifa we have launched Financial Vision. Financial Vision offers an financial advisor website design service to the financial services industry.
