The Management Consulting Group

its not long before the close of the tax year comes near. It is essential to make the most of any personal allowances and tax breaks that are useable.
By using the annual exemptions and allowances you might bring down your tax bill considerably. This can normally be done quick and easily with the assistance of a financial advisor.

Tax effective investing

Individual savings accounts
Individual Savings Accounts (ISAs). If you are aged over 50 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 annual income and are one of the most tax efficient investments available

Pensions

Pensions are also a tax efficient way of planning for retirement. Most people can pay up to three thousand six hundred pounds gross each year and obtain basic rate tax relief on the contribution made. 40% taxpayers can claim the residual on their self assessment.

Capital Gains Tax Opportunities

If you have made gains on certain types of investment you may be able to use your yearly capital gains tax allowance. This will enable you to make gains up to this level without getting a liability to tax. In some cases it is also viable to carry forward previous year’s losses.

Income Tax Planning

Each person can have a personal allowance of £6,475 without acquiring any income tax. For wedded couples or civil partnerships, where one is a higher rate taxpayer it is worth looking to see who owns the investment and potentially look to transfer assets into the
basic rate taxpayers name.Making gifts is also a way of cutting your liability to income tax.

Saving IHT

Each individual can make an IHT exempt gift each year of up to £3000 in a tax year. Any unused exemption can be carried forward for 1 year only. If you are capable to make gifts out of income without it affecting your standard of living you might be able to make gifts over the yearly exemption level.

If you think your estate could be in excess of the Inheritance Tax nil rate band then effective tax planning can be used to bring down your estates likely IHT liability. This could include a suitably drafted will or instead trust planning.

Consilium Asset Management are Financial Advisers based in Chipping Sodbury, Bristol, South Gloucestershire.

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