End of Year Tax Saving Opportunities
its not long before the final stage of the tax year draws near. It is so essential to make the most of any personal allowances and tax breaks that are .
By using the allowances and exemptions you could potentially reduce your tax charge substantially. This can usually be done quick and easily with the assistance of an independent financial adviser.
Tax effective investing
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 annual 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 people can contribute up to £3600 gross each tax year and obtain basic rate tax relief on the contribution made. Forty percent taxpayers can claim the residue on their self assessment.
Capital Gains Tax Opportunities
If you have made profit on certain types of investment you may be able to use your yearly capital gains tax allowance. This will allow you to make gains up to this level without incurring a liability to pay tax. In many examples it is also possible to carry forward past year’s losses.
Income Tax Planning
Each individual can have a personal allowance of £6475.00 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 annual gifts is also a means of keeping down your liability to income tax.
Inheritance Tax Planning
An individual can give an IHT exempt gift each year of up to £3000 in a tax year. Any unused allowance can be carried ahead for 1 yr only. If you are able to make gifts out of income without it altering your standard of living you may be able to make gifts above the annual exemption limit.
If you think your estate could be in excess of the IHT nil rate band then effective tax planning can be used to cut back your estates potential inheritance tax liability. This could include a suitably drafted will or instead trust provision.
Consilium Asset Management are IFA’s based in Chipping Sodbury South Gloucestershire.
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