Inheritance Tax Planning
You have worked hard all your life and now have a nice house, a decent pension, some investments and savings in the bank. If it’s worth more than £325,000 (Nil Rate Band 2014/15) unless you do some planning, 40% of anything above this figure will go to the government? Did you expect that?
There are actually lots of legal ways to reduce this which can include making small annual payments within certain limits, giving larger gifts away and surviving seven years (potentially exempt transfers - PETS), using spousal allowances, tax schemes or simply taking out some life assurance written under an appropriate trust to fund the liability therefore relieving your family of the burden.
This isn’t something to do in the future, if your estate is above the threshold and you can afford to do something about it then don’t wait - act now. We think that the richest people in country tend to pay the least taxes and that is because they plan well and plan in advance. You don’t necessarily need to spend a lot to sort this out.
Will Writing
Trying not to tempt fate by not writing a will? Well that could backfire as you will die sometime, sad but true, and unless you have a really good soothsayer you are not going to know when.
If you die ‘intestate’ with no will then your estate will be distributed in line with the laws of the land so don’t expect it to go where you want it to and if you don’t have family then your money will end up with the tax man and they are unlikely to be your first choice! If you are unmarried or divorced/separated your affairs need some careful consideration.
We can't write wills but we can collect all the necessary information and refer your details to one of our partner companies who can talk to you about wills, power of attorneys and executors.
Investment Tax Planning
So if your investment returned £100 you could either get £100 (tax free investment) but this would become £80 as a basic rate tax payer or £60 if you are a higher rate tax payer. What could you buy with that extra £40? Well what If it was £10000? What could you buy with £4000? What if the tax man actually gave you tax back as well?
This isn’t just about different types of investments but also about your tax position both now and in the future. Consider what capital gains tax allowances you can utilise, how to use your families allowances, how to use pensions to reduce your income tax. Are you eligible for Enterprise Investment Schemes (EIS) or Venture Capital Trusts (VCT)? It isn’t all for the faint-hearted but for the right person it can be hugely beneficial.
You may already use an accountant or are doing your own tax returns. We will work with them and/or you to utilise every opportunity.
Key fact:
5th April is the most important day of the tax calendar - the end of the tax year - and any tax free allowances will be lost if you don't take action before this day. So don’t leave it until the last minute!
“The Financial Conduct Authority does not regulate will writing, or taxation and trust advice.”
