2009/2010 Tax Saving Opportunities
It s not very long before the close of the tax year approaches. It is essential to make use of any personal allowances and tax breaks that are obtainable.
By using the annual exemptions and allowances you might bring down your tax bill considerably. This can commonly be done promptly 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 actual tax year is now £10,200. ISA’s are free from capital gains tax, can be used to provide an income and are one of the most tax efficient investment vehicles obtainable
Pensions
Pensions are also a tax efficient way of saving for retirement. Most individuals can contribute up to £3,600 gross each year and obtain basic rate tax relief on the contribution. Higher rate taxpayers can claim the residue on their self assessment.
Capital Gains Tax Planning
If you have made gains on certain types of investment you may be able to use your annual capital gains tax allowance. This will allow you to make gains up to this threshold without receiving a liability to pay tax. In many cases it is also possible to carry forward previous year’s losses.
Income Tax Opportunities
Each person can have a personal allowance of 6475 without incurring any income tax. For married couples or civil partnerships, where one is a 40% taxpayer it is worth looking to see who owns the investment and perhaps look to transfer assets into the
BR taxpayers name.Making annual gifts is also a means of cutting your liability to income tax.
Saving Inheritance Tax
A person can make 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 capable to make gifts out of income without it affecting your standard of living you may be able to make gifts above the annual exemption limit.
If you consider your estate could be over the IHT nil rate band then good tax planning can be used to cut your estates possible IHT liability. This could be a suitably drafted will or alternatively trust provision.
Consilium Asset Management are IFA’s based in Bristol, South Gloucestershire.
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