The Towing Path

It s not long before the close of the tax year comes near. It is crucial to make use of any personal allowances and tax breaks that are available to you.
By using the allowances and exemptions you could potentially bring down your tax bill substantially. This can usually be done quickly and easily with the help of a financial adviser.

Tax effective investments

Individual savings accounts
Individual Savings Accounts (ISAs). If you are aged over fifty your Isa allowance for the actual 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 investment products available

Pensions

Pensions are also a tax effective way of planning for retirement. Most individuals can pay in up to three thousand six hundred pounds gross each tax year and obtain basic rate tax relief on the contribution made. 40% taxpayers can claim the residue on their self assessment.

Capital Gains Tax Opportunities

If you have made gains on certain types of investment you may be able to use your yearly capital gains tax allowance. This will let you to make gains up to this threshold without acquiring a liability to pay tax. In some cases it is also possible to carry forward previous year’s losses.

Income Tax Planning

Each person can have a personal allowance of 6475 without acquiring any income tax. For espoused pairs or civil partnerships, where one is a higher 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 gifts is also a means of keeping down your liability to income tax.

IHT planning

Every Person can make an IHT exempt gift each year of up to £3000 in a tax yr. Any unused exemption can be carried forward for 1 year only. If you are able to make gifts out of income without it affecting your standard of living you may be able to make gifts above the yearly exemption limit.

If you think your estate could be over the IHT nil rate band then effective tax planning can be used to cut your estates possible inheritance tax liability. This could be a suitably drafted will or alternatively trust planning.

Consilium Asset Management are independent financial advisers based in South Gloucestershire.

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