Year End Tax Strategies
its not very long before the ending of the tax year nears. It is vital to make use of any personal allowances and tax breaks that are available to you.
By using the annual exemptions and allowances you could potentially bring down your tax charge considerably. This can ordinarily be done quickly and easily with the assistance of an ifa.
Tax effective investments
Individual savings accounts
Individual Savings Accounts (ISAs). If you are aged over fifty 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 that can be used
Pensions
Pensions are also a tax efficient way of saving for retirement. Most individuals can pay in up to £3600 gross each twelvemonth and obtain basic rate tax relief on the payment. Forty percent taxpayers can claim the residue on their self assessment.
Capital Gains Tax Opportunities
If you have made profit on certain types of investments you may be able to use your annual capital gains tax allowance. This will enable you to make gains up to this amount without getting a liability to pay tax. In some cases it is also possible to carry forward previous year’s losses.
Income Tax Planning
Each individual can have a personal allowance of £6475.00 without acquiring any income tax. For wedded couples or civil partnerships, where one is a high rate taxpayer it is worth looking to see who owns the investments and possibly look to transfer assets into the
BR taxpayers name.Making annual gifts is also a means of keeping down your liability to income tax.
Saving Inheritance Tax
Every Person can give an IHT exempt gift each year of up to 3,000 in a tax yr. Any unused exemption can be carried ahead for 1 yr only. If you are capable to make gifts out of income without it altering your standard of living you might be able to make gifts over the yearly exemption level.
If you think your estate could be in excess of the Inheritance Tax nil rate band then effective tax planning can be applied to cut your estates potential inheritance liability. This could include a appropriately drafted will or instead trust planning.
Consilium Asset Management are Independent Financial Advisors based in Bristol, South Gloucestershire.
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