02.09.10
End of Year Tax Advice
It s not very long before the end of the tax year nears. It is essential to make the most of any personal allowances and tax breaks that are .
By using the annual allowances and exemptions you will potentially bring down your tax bill considerably. This can usually be done promptly and easily with the advice of a financial adviser.
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 contribute up to three thousand six hundred pounds gross each twelvemonth and obtain basic rate tax relief on the contribution made. Higher rate taxpayers can claim the residual on their self assessment.
Capital Gains Tax Opportunities
If you have made profits on certain types of investments you may be able to use your annual capital gains tax allowance. This will let you to make gains up to this threshold without acquiring a liability to tax. In many cases it is also possible to carry forward past year’s losses.
Income Tax Planning
Each individual can receive a personal allowance of £6,475 without acquiring any income tax. For espoused pairs or civil partnerships, where one is a forty percent 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 annual gifts is also a way of keeping down your liability to income tax.
Inheritance Tax Planning
Each person can give an IHT exempt gift each year of up to £3000 in a tax twelvemonth. Any unused exemption can be carried forward for 1 yr only. If you are capable to make gifts out of income without it affecting your standard of living you might be allowed to make gifts over the yearly exemption limit.
If you think your estate could be over the IHT nil rate band then good tax planning can be utilized to bring down your estates future inheritance liability. This could include a suitably drafted will or alternatively trust provision.
Consilium Asset Management are independent financial advisers based in Bristol, South Gloucestershire.
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