Year End Tax Reduction Plans
its not long before the end of the tax year nears. It is so important to make the most of any personal allowances and tax breaks that are available.
By using the exemptions and allowances you might reduce your tax charge considerably. This can normally be done promptly and easily with the assistance 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 products available
Pensions
Pensions are also a tax effective way of planning for retirement. Most individuals can pay in up to £3600 gross each yr and obtain basic rate tax relief on the contribution made. 40% taxpayers can claim the residual on their self assessment.
Capital Gains Tax Planning
If you have made profits 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 level without receiving a liability to tax. In some cases it is also possible to carry forward past year’s losses.
Income Tax Planning
Each individual can have a personal allowance of £6475.00 without acquiring any income tax. For espoused 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
basic rate taxpayers name.Making gifts is also a way of reducing your liability to income tax.
Inheritance Tax Planning
Each individual can give an IHT exempt gift each year of up to £3000 in a tax twelvemonth. Any unused exemption can be carried ahead for one yr only. If you are capable to make gifts out of income without it affecting your standard of living you may be able to make gifts above the annual exemption limit.
If you believe your estate could be above the IHT nil rate band then good tax planning can be used to cut back your estates future inheritance tax liability. This could be a suitably drafted will or alternatively trust provision.
Consilium Asset Management are Independent Financial Advisors based in Bristol, South Gloucestershire.
If you are a independent financial advisor we have established Financial Vision. Financial Vision provides an financial adviser web site design service to the financial service industry.
Written on February 2nd, 2010 with
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