End of Year Tax Saving Opportunities
It s not long before the end of the tax year comes near. It is so important to make the most of any allowances and tax breaks that are .
By using the exemptions and allowances you might possibly bring down your tax bill considerably. This can commonly be done quick and easily with the assistance 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 actual 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 obtainable
Pensions
Pensions are also a tax efficient 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 level without acquiring a liability to tax. In some examples it is also possible 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 espoused couples or civil partnerships, where one is a 40% taxpayer it is worthwhile looking to see who owns the investment and potentially look to transfer assets into the
20% twenty percent taxpayers name.Making annual gifts is also a way of reducing your liability to income tax.
Inheritance tax (IHT) planning
Every individual can give an IHT exempt gift each year of up to Three thousand pounds in a tax yr. Any unused exemption can be carried ahead for one yr only. If you are able to make gifts out of income without it affecting your standard of living you may be allowed to make gifts above the yearly exemption limit.
If you consider your estate could be in excess of the IHT nil rate band then good tax planning can be employed to reduce your estates likely inheritance liability. This could be a appropriately drafted will or instead trust provision.
Consilium Asset Management are Financial Advisors based in Bristol.
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