It s not very long before the final stage of the tax year nears. It is so important to make use of any allowances and tax breaks that are available to you.
By using the annual allowances and exemptions you might reduce your tax bill considerably. This can normally be done quickly and easily with the help 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 an income and are one of the most tax efficient investment vehicles available
Pensions
Pensions are also a tax effective way of planning for retirement. Most individuals can pay up to £3600 gross each year and obtain basic rate tax relief on the payment. 40% taxpayers can claim the residue 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 yearly capital gains tax allowance. This will let you to make gains up to this amount without receiving a liability to pay tax. In many examples it is also viable to carry forward previous year’s losses.
Income Tax Planning
Each person can have a personal allowance of £6475 without incurring any income tax. For wedded couples or civil partnerships, where one is a 40% taxpayer it is worth looking to see who owns the investment and perhaps look to transfer assets into the
20% twenty percent taxpayers name.Making gifts is also a means of reducing your liability to income tax.
Inheritance Tax opportunities
Every individual can make an IHT exempt gift each year of up to 3,000 in a tax yr. Any unused exemption can be carried forward for 1 yr only. If you are capable to make gifts out of income without it changing your standard of living you may be able to make gifts over the yearly exemption level.
If you think your estate could be above the IHT nil rate band then effective tax planning can be employed to cut your estates future inheritance tax liability. This could be a appropriately drafted will or instead trust provision.
Consilium Asset Management are Financial Advisors based in Chipping Sodbury, Bristol, South Gloucestershire.
If you are a independent financial advisor we have set up Financial Vision. Financial Vision offers an financial adviser web site design implementation service to the financial service industry.
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