OTYC Blog

It s not very long before the end of the tax year nears. It is vitally important to make use of any personal allowances and tax breaks that are obtainable.
By using the annual allowances and exemptions you might possibly bring down your tax bill considerably. This can normally be done quickly and easily with the help of an ifa.

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 annual income and are one of the most tax efficient investments that can be used

Pensions

Pensions are also a tax efficient way of saving for retirement. Most individuals can contribute up to £3600 gross each tax year and obtain basic rate tax relief on the contribution made. Forty percent taxpayers can claim the residue 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 yearly capital gains tax allowance. This will enable you to make gains up to this level without acquiring a liability to tax. In many examples it is also viable to carry forward previous year’s losses.

Income Tax Opportunities

Each person can receive a personal allowance of £6,475 without acquiring any income tax. For espoused couples or civil partnerships, where one is a 40% taxpayer it is worth looking to see who owns the investment and possibly look to transfer assets into the
20% twenty percent taxpayers name.Making gifts is also a way of keeping down your liability to income tax.

Saving IHT

Each person can give an IHT exempt gift each year of up to £3000 in a tax twelvemonth. Any unused allowance can be carried forward for 1 year only. If you are able to make gifts out of income without it changing your standard of living you may be able to make gifts above the yearly exemption level.

If you believe your estate could be above the IHT nil rate band then effective tax planning can be utilized to reduce your estates future inheritance liability. This could include a appropriately drafted will or instead trust provision.

Consilium Asset Management are IFA s based in Chipping Sodbury, Bristol, South Gloucestershire.

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