February 6, 2010
09/10 Tax Saving Opportunities
It s not very long before the end of the tax year comes near. It is essential to make the most of any allowances and tax breaks that are .
By using the annual allowances and exemptions you might be able to bring down your tax bill substantially. This can usually be done promptly 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 current 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 that can be used
Pensions
Pensions are also a tax efficient way of saving for retirement. Most people can contribute up to £3,600 gross each tax year and obtain basic rate tax relief on the contribution. Higher rate taxpayers can claim the remainder on their self assessment.
Capital Gains Tax Planning
If you have made profit on certain types of investments you may be able to use your annual capital gains tax allowance. This will allow you to make gains up to this threshold without acquiring a liability to tax. In some cases it is also viable to carry forward past year’s losses.
Income Tax Planning
Each person can have a personal allowance of £6,475 without incurring any income tax. For wedded couples or civil partnerships, where one is a high rate taxpayer it is worth looking to see who owns the investment and potentially look to transfer assets into the
basic rate taxpayers name.Making annual gifts is also a means of reducing your liability to income tax.
Inheritance Tax opportunities
A person can give an IHT exempt gift each year of up to Three thousand pounds in a tax twelvemonth. 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 limit.
If you believe your estate could be above the Inheritance Tax nil rate band then efficient tax planning can be employed to bring down your estates potential inheritance liability. This could be a suitably drafted will or instead trust provision.
Consilium Asset Management are IFA’s based in Bristol.
If you are a independent financial adviser we have established Financial Vision. Financial Vision supplies an IFA website design implementation service to the financial services industry.