It s not long before the ending of the tax year approaches. It is very important to make use of any allowances and tax breaks that are obtainable.
By using the exemptions and annual allowances you might possibly reduce your tax charge considerably. This can normally be done promptly and easily with the help 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 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 that can be used

Pensions

Pensions are also a tax effective way of planning for retirement. Most people can pay up to £3,600 gross each yr and obtain basic rate tax relief on the payment made. Forty percent taxpayers can claim the remainder on their self assessment.

Capital Gains Tax Opportunities

If you have made profit 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 amount without acquiring a liability to pay tax. In many examples it is also viable to carry forward past year’s losses.

Income Tax Planning

Each person can receive a personal allowance of £6475 without acquiring any income tax. For wedded pairs or civil partnerships, where one is a high rate taxpayer it is worth looking to see who owns the investment and possibly look to transfer assets into the
BR taxpayers name.Making annual gifts is also a way of cutting your liability to income tax.

Inheritance Tax Planning

Each 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 one yr only. If you are capable to make gifts out of income without it altering your standard of living you might be allowed to make gifts over the annual exemption level.

If you believe your estate could be in excess of the IHT nil rate band then efficient tax planning can be employed to reduce your estates likely inheritance tax liability. This could include a suitably drafted will or instead trust planning.

Consilium Asset Management are Independent Financial Advisors based in South Gloucestershire.

If you are a financial advisor we have launched Financial Vision. Financial Vision supplies an IFA website design implementation service to the financial service industry.