End of Year Tax Saving
It s not long before the end of the tax year approaches. It is so essential to make the most of any allowances and tax breaks that are .
By using the exemptions and annual allowances you might be able to reduce your tax bill substantially. This can usually be done promptly and easily with the help of a financial advisor.
Tax effective investing
Individual savings accounts
Individual Savings Accounts (ISAs). If you are aged over fifty your Isa allowance for the current 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 investments obtainable
Pensions
Pensions are also a tax effective way of planning for retirement. Most people can pay in up to 3,600 gross each tax year and obtain basic rate tax relief on the contribution made. Higher rate taxpayers can claim the residue on their self assessment.
Capital Gains Tax Opportunities
If you have made gains on certain types of investments you may be able to use your yearly capital gains tax allowance. This will enable you to make gains up to this threshold without acquiring a liability to tax. In some examples it is also possible to carry forward previous year’s losses.
Income Tax Planning
Each individual can receive a personal allowance of £6,475 without incurring any income tax. For wedded pairs or civil partnerships, where one is a high rate taxpayer it is worthwhile looking to see who owns the investment and perhaps look to transfer assets into the
BR taxpayers name.Making gifts is also a means of reducing your liability to income tax.
Saving IHT
Each individual can give an IHT exempt gift each year of up to Three thousand pounds in a tax year. Any unused exemption can be carried forward for 1 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 above the yearly exemption limit.
If you think your estate could be in excess of the IHT nil rate band then good tax planning can be employed to cut your estates likely IHT liability. This could include a suitably drafted will or instead trust provision.
Consilium Asset Management are Financial Advisers based in South Gloucestershire.
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