2009/2010 Tax Strategies
its not very long before the end of the tax year comes near. It is so essential to make the most of any personal allowances and tax breaks that are available.
By using the annual exemptions and allowances you might possibly bring down your tax charge considerably. This can normally be done quick 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 a regular income and are one of the most tax efficient investments that can be used
Pensions
Pensions are also a tax effective way of saving for retirement. Most people can contribute up to 3,600 gross each tax year and obtain basic rate tax relief on the payment made. Higher rate taxpayers can claim the remainder 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 getting a liability to tax. In many cases it is also possible to carry forward past 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 forty percent taxpayer it is worthwhile looking to see who owns the investments and possibly look to transfer assets into the
basic rate taxpayers name.Making annual gifts is also a means of reducing your liability to income tax.
Inheritance Tax Planning
An individual can make an IHT exempt gift each year of up to £3000 in a tax year. Any unused allowance can be carried forward for 1 year 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 level.
If you believe your estate could be above the IHT nil rate band then good tax planning can be used to bring down your estates likely inheritance tax liability. This could be a suitably drafted will or alternatively trust provision.
Consilium Asset Management are Financial Advisors based in Chipping Sodbury, Bristol, South Gloucestershire.
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