09/10 Tax Planning
7 February 2010
its not long before the end of the tax year nears. It is very important to make use of any personal allowances and tax breaks that are .
By using the annual exemptions and allowances you will reduce your tax bill substantially. This can ordinarily be done quickly and easily with the help of a financial adviser.
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 an annual income and are one of the most tax efficient investments available
Pensions
Pensions are also a tax effective way of saving for retirement. Most people can contribute up to £3600 gross each twelvemonth and obtain basic rate tax relief on the contribution made. Higher rate taxpayers can claim the balance 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 threshold without getting a liability to pay tax. In some examples it is also possible to carry forward previous year’s losses.
Income Tax Opportunities
Each person can have a personal allowance of 6475 without acquiring any income tax. For espoused pairs or civil partnerships, where one is a high rate taxpayer it is worthwhile looking to see who owns the investments and potentially look to transfer assets into the
BR taxpayers name.Making gifts is also a means 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 yr. Any unused allowance can be carried forward for one yr only. If you are capable to make gifts out of income without it affecting your standard of living you might be able to make gifts above the annual exemption limit.
If you believe your estate could be in excess of the Inheritance Tax nil rate band then effective tax planning can be applied to bring down your estates future inheritance tax liability. This could be a suitably drafted will or alternatively trust provision.
Consilium Asset Management are independent financial advisers based in Bristol.
If you are a independent financial adviser we have launched Financial Vision. Financial Vision offers an financial advisor web site design implementation service to the financial service industry.
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