Time for a tax health check

As the current tax year draws to a close, it could be time for a tax health check. When was the last time you had one?

Our handy checklist is a good place to start.

Income tax

  • Earning over £150,000?  avoid paying 45% tax with pension contributions
  • Earning over £100,000?  reclaim your personal allowance using pensions
  • Reinvest in tax free investments such as ISA to replace taxable income with tax free income
  • Transfer investments to your spouse to reduce the rate of income tax paid.
Capital Gains Tax
  • This is the last year to receive the annual exempt amount of £12,300 which falls to £6,000 next year. Use it or lose it!
  • Use two annual exemptions back-to-back – one before the 5th of April and one after
  • Gift assets to your spouse so that you ensure that you both use your annual exemptions.
  • Make use of any available losses.
Inheritance Tax
  • You can make an inheritance tax free gift of £3000 for this year, and one for the previous year
  • Set up a regular gift out of your surplus income to reduce your estate straightaway
  • Look at the use of trusts, loan trusts and outright gifts to reduce your future liability.
Pensions
  • You can contribute your unused allowances for the previous three tax years . Use them or lose them !
  • If you are a high earner, check to see if the taper applies as you may be overpaying into your pension
  • Again, look at reducing your income below £150,000, £100,000 and also £50,000 to claim child benefit
  • Non earners in a household can make a contribution of £2880 each (topped up by the government to £3,600 gross).
Savings and Investments
  • If you can control your dividends, pay yourself £2000 tax free
  • Maximise your ISAs (£20,000 per person) if you can
  • If you have money in a General Investment Account, sell down up to £20,000 and move it to an ISA (bed and ISA)
  • Venture Capital Trusts and EIS  can give you up to 30% tax relief but are typically high risk and lack liquidity.

It’s time to get planning ! Get in touch with us for an initial consultation at our expense to see how we can help reduce your tax liabilities.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
The value of investments may go down as well as up and you may get back less than you invest. Past performance is not a reliable indicator of future performance.
The Financial Conduct Authority does not regulate some aspects of Trust, Tax and Estate Planning.
Levels and bases of, and reliefs from taxation are subject to change and their value depends on the individual circumstances of the investor.
The favourable tax treatment of ISAs may be subject to changes in legislation in the future.
A pension is a long-term investment, the value of your investment and the income from it may go down as well as up. Your eventual income may depend upon the size of the fund at retirement, future interest rates and tax legislation.

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