2009/2010 Tax Strategies
its not very long before the final stage of the tax year nears. It is essential to make use of any personal allowances and tax breaks that are .
By using the annual allowances and exemptions you will potentially bring down your tax charge considerably. This can commonly be done quick and easily with the assistance of a financial advisor.
Tax effective investments
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 people can pay up to three thousand six hundred pounds gross each tax year and obtain basic rate tax relief on the contribution. 40% taxpayers can claim the remainder on their self assessment.
Capital Gains Tax Planning
If you have made profit on certain types of investment you may be able to use your annual capital gains tax allowance. This will enable you to make gains up to this threshold without acquiring a liability to pay tax. In many examples it is also possible to carry forward past year’s losses.
Income Tax Planning
Each individual can have a personal allowance of £6475 without incurring any income tax. For wedded couples or civil partnerships, where one is a high rate taxpayer it is worthwhile looking to see who owns the investment and perhaps look to transfer assets into the
20% twenty percent taxpayers name.Making gifts is also a way of cutting your liability to income tax.
Inheritance Tax Planning
A person can give an IHT exempt gift each year of up to 3,000 in a tax yr. Any unused exemption can be carried forward for one year only. If you are capable to make gifts out of income without it altering your standard of living you may be allowed to make gifts over the annual exemption level.
If you consider your estate could be above the Inheritance Tax nil rate band then efficient tax planning can be used to cut back your estates likely IHT liability. This could include a appropriately drafted will or alternatively trust planning.
Consilium Asset Management are Independent Financial Advisors based in Chipping Sodbury, Bristol, South Gloucestershire.
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