It s not long before the end of the tax year draws near. It is crucial to make use of any personal allowances and tax breaks that are obtainable.
By using the allowances and exemptions you might be able to bring down your tax charge substantially. This can normally be done quick and easily with the assistance of a financial adviser.

Tax effective investments

Individual savings accounts
Individual Savings Accounts (ISAs). If you are aged over fifty your Isa allowance for the present 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 available

Pensions

Pensions are also a tax effective way of saving for retirement. Most people can pay up to £3600 gross each tax year and obtain basic rate tax relief on the contribution made. 40% taxpayers can claim the residual 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 annual capital gains tax allowance. This will allow you to make gains up to this amount without incurring a liability to pay tax. In many examples it is also possible to carry forward previous year’s losses.

Income Tax Planning

Each person can have a personal allowance of £6475.00 without incurring any income tax. For wedded pairs or civil partnerships, where one is a high rate taxpayer it is worth looking to see who owns the investments and potentially look to transfer assets into the
basic rate taxpayers name.Making gifts is also a means of cutting your liability to income tax.

Inheritance tax (IHT) planning

Every individual can make an IHT exempt gift each year of up to £3000 in a tax twelvemonth. Any unused allowance can be carried forward for one year only. If you are capable to make gifts out of income without it changing your standard of living you may be able to make gifts over the yearly exemption limit.

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

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

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