Where Trust Is Money

It s not very long before the ending of the tax year draws near. It is very important to make the most of any personal allowances and tax breaks that are useable.
By using the allowances and annual exemptions you might possibly bring down your tax bill substantially. This can normally be done quickly and easily with the assistance 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 a regular income and are one of the most tax efficient investments obtainable

Pensions

Pensions are also a tax efficient way of saving for retirement. Most individuals can contribute up to £3600 gross each twelvemonth and obtain basic rate tax relief on the contribution. Forty percent taxpayers can claim the balance on their self assessment.

Capital Gains Tax Opportunities

If you have made gains 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 receiving a liability to tax. In some cases it is also viable to carry forward previous year’s losses.

Income Tax Planning

Each person can receive a personal allowance of £6,475 without incurring any income tax. For married couples or civil partnerships, where one is a higher rate taxpayer it is worth looking to see who owns the investment and perhaps look to transfer assets into the
basic rate taxpayers name.Making annual gifts is also a means of cutting your liability to income tax.

Saving Inheritance Tax

An individual can make an IHT exempt gift each year of up to 3,000 in a tax year. Any unused exemption can be carried forward for 1 year only. If you are capable to make gifts out of income without it affecting your standard of living you may be able to make gifts above the yearly exemption level.

If you consider your estate could be in excess of the IHT nil rate band then efficient tax planning can be used to cut your estates potential inheritance tax liability. This could include a suitably drafted will or alternatively trust provision.

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

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