Tax Planning

Tax Planning

Your Guide to Tax Year Planning

Financial Planning, Investments, ISA, Pensions, Savings, Tax Planning
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We all need to pay our taxes however according to Unbiased UK taxpayers are expected to give away around £4.6 billion in unnecessary taxes.

Yet there are legitimate opportunities to help you reduce your tax bill. You may be unaware of the opportunities,  how to take advantage, or simply not had the time to take action.

With the end of the 2016/2017 tax year fast approaching we wanted to highlights some key tax planning opportunities.

Download Your Guide to Tax Year Planning

2016/17 Your Guide to Tax Planning

There is no doubt that Tax is a complex area. If you have multiple sources of income and/or run a business. However many end up paying more than they should out of fear of paying too little tax .

The most common areas where we find tax planning opportunities are:

  • Tax -efficient Savings
  • Retirement planning
  • Inheritance tax
  • Capital gains tax

A good independent financial adviser or an accountant will help you identify tax planning opportunities. Even small tax planning steps can add up to a significant saving in the long term.

If you would like to explore the options available to you in preparation for the 2016/17 tax year end, please contact us on the number below:

Call 02886 440475 to book an initial consultation now

Please note that the Financial Conduct Authority does not regulate some forms of tax advice.

What you need to know about the Autumn Statement 2014

Financial Planning, General, Investments, ISA, Pensions, Savings, Tax Planning
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What you need to know about the Autumn Statement 2014

On 3rd December 2014 George Osborne gave us his Annual Autumn Statement which for reasons best known to someone else is in December.  But that’s not important right now and if you’re like me it will be googled later.  Anyway here are some of the main points relevant to your personal financial planning broken down into relevant headings.

Income

The income tax personal allowance will rise to £10,600 in April 2014 which is £100 higher than expected. The higher rate tax threshold will also increase to £42,385 in April, again £100 more than expected.

Anyone in receipt of Universal Credit will find their benefits frozen for the coming year.

Savings

The ISA limit has been raised to £15,240 in April.  The chancellor has also said that with immediate effect when the saver dies their spouse will inherit the ISA and be able to maintain its tax free status.  This could be very interesting for future IHT planning.

Pensions

As expected the Chancellor announced that if you die prior to age 75 in receipt of a joint life annuity pension your dependents with receive the dependents income tax free.

This brings joint life annuities in line with flexi-access drawdown but there was no mention of final salary schemes dependents pensions so watch this space.

There were no changes to the tax relief through pensions either before or after age 75.

The single tier state pension is expected to start in April 2016 at £151.25 per week.

Property

As usual the Government wants a headline maker in the Autumn Statement and this year it’s stamp duty.  The stamp duty system has been revamped from a stepped to a tiered charging system as show below.

[table width =”100%” style =”table-striped table-bordered table-hover” responsive =”true”] [table_head] [th_column]Purchase price[/th_column] [th_column]Stamp Duty[/th_column] [/table_head] [table_body] [table_row] [row_column]First £125,000[/row_column] [row_column]0%[/row_column] [/table_row] [table_row] [row_column]£125,001-£250,000[/row_column] [row_column]2%[/row_column] [/table_row] [table_row] [row_column]£250,001-£925,000[/row_column] [row_column]5%[/row_column] [/table_row] [table_row] [row_column]£925,001-£1.5m[/row_column] [row_column]10%[/row_column] [/table_row] [table_row] [row_column]£1.5m+[/row_column] [row_column]12%[/row_column] [/table_row] [/table_body] [/table]

For example if you buy a property for £275,000 you will pay a total of £3,750 in stamp duty which equates to 1.36%. Under the old regime you would have paid £8,250 at 3% on the whole lot.

The End is Nigh… well the end of the tax year that is

Business, Financial Planning, Investments, ISA, Pensions, Savings, Tax Planning
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The End is Nigh… well the end of the tax year that is

Last minute tax planning is less than ideal but it’s better than no tax planning.  Every year we all get our tax allowances and every year we get the same warning before April 5th… use it or lose it.

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What are the tax allowances for this year?

I’m going to limit this post to the main two tax allowances, Pensions and ISAs. Simply because for most of the population these are more than enough to cover our financial planning needs.

ISA Allowances 2013/14 & 2014/15

Up to the 5th April 2014 you can invest up to £11,520 in ISAs of which £5,760 can be invested in a Cash ISA. Remember there is now carry forward of unused allowances with ISAs.  From 6th April your annual ISA allowance will increase to £11,880 with a maximum of £5,940 in cash.

For those who have a little more to invest and want to create a fund for their child there are allowance for Junior ISAs and Child Trust Funds as detailed in the table below.

2013-14

2014-15

Individual Savings Account (ISA) subscription limit
   Overall limit  £        11,520  £        11,880
   of which cash  £          5,760  £          5,940
   of which stocks and shares  £        11,520  £        11,880
Junior ISA subscription limit  £          3,720  £          3,840
Child Trust Fund (CTF) subscription limit  £          3,720  £          3,840

Pension Allowances 2013/14 & 2014/15

Up to the 5th April 2014 you can invest up to the lower of 100% of your gross earnings or £50,000 in a registered pension scheme.  From 6th April your annual pension allowance will reduce to £40,000 however carry forward is allowed under certain rules.

Although it won’t affect most of us it’s important to remember that there is a lifetime allowance to consider.  This is being reduced from £1.5m to £1.25m from 6th April 2014.

Again for those with a little more to invest there are children’s allowances available.

Beware the Tax Dog

Remember that just because it is tax efficient doesn’t necessarily mean it’s the most suitable investment for you or your objectives.  Think carefully about what you want to achieve before making any investment.  Obviously as a Financial Planner I am going to recommend getting advice but if you are in any doubt on how to proceed then get in touch on 02895 815000.

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