Soropa Blog

It s not long before the end of the tax year nears. It is vitally important to make the most of any personal allowances and tax breaks that are useable.
By using the allowances and annual exemptions you could potentially bring down your tax charge substantially. This can normally be done quick and easily with the advice 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 a regular income and are one of the most tax efficient investments available

Pensions

Pensions are also a tax effective way of planning for retirement. Most individuals can pay up to 3,600 gross each tax year and obtain basic rate tax relief on the contribution 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 annual capital gains tax allowance. This will let you to make gains up to this level without acquiring a liability to pay tax. In some cases 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 acquiring any income tax. For espoused pairs or civil partnerships, where one is a forty percent taxpayer it is worth looking to see who owns the investments and possibly look to transfer assets into the
basic rate taxpayers name.Making gifts is also a means of keeping down your liability to income tax.

Saving IHT

Every individual can give an IHT exempt gift each year of up to Three thousand pounds in a tax twelvemonth. Any unused allowance can be carried forward for one yr only. If you are able to make gifts out of income without it altering your standard of living you might be allowed to make gifts above the annual exemption limit.

If you consider your estate could be above the IHT nil rate band then effective tax planning can be utilized to reduce your estates potential inheritance tax liability. This could be a suitably drafted will or alternatively trust provision.

Consilium Asset Management are IFA’s based in Bristol.

If you are a ifa we have established Financial Vision. Financial Vision provides an financial advisor web site design implementation service to the financial services industry.