2009/2010 Tax Planning
It s not very long before the final stage of the tax year approaches. It is vitally important to make the most of any personal allowances and tax breaks that are obtainable.
By using the annual exemptions and allowances you will potentially bring down your tax charge considerably. This can ordinarily be done promptly and easily with the help of an independent financial adviser.
Tax effective investments
Individual savings accounts
Individual Savings Accounts (ISAs). If you are aged over 50 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 products obtainable
Pensions
Pensions are also a tax efficient way of saving for retirement. Most people can pay up to £3600 gross each yr and obtain basic rate tax relief on the payment. Higher rate taxpayers can claim the residue on their self assessment.
Capital Gains Tax Planning
If you have made gains 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 amount without getting a liability to pay 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 couples or civil partnerships, where one is a higher rate taxpayer it is worth 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 opportunities
Each individual can give an IHT exempt gift each year of up to 3,000 in a tax year. Any unused allowance can be carried ahead 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 level.
If you consider your estate could be over the Inheritance Tax nil rate band then effective tax planning can be applied to bring down your estates future inheritance liability. This could be a suitably drafted will or instead trust planning.
Consilium Asset Management are IFA’s based in Bristol, South Gloucestershire.
If you are a ifa we have launched Financial Vision. Financial Vision supplies an financial advisor website design implementation service to the financial services industry.
