Year End Tax Planning | How can you reduce your bill? | POSTED BY ROGER EDDOWES ON 01/04/2019 @ 8:00AM
The 2018/19 tax year is rapidly coming to a close. Have you considered every aspect of your tax planning?
When it comes to your tax planning, there are many reliefs and exemptions available! copyright: joykid / 123rf
Although minds are focussed on tax reduction at this time of year, there are a number of ways to reduce your tax bill that can be considered at any time. When it comes to your personal tax, each individual has their personal allowance so it is always important to ensure it is utilised to its full potential.
"Remember, if your spouse has a lower income, it is possible to transfer £1,190 (for 2018/19) of your allowance to them!"
If you have a pension, contributions of up to £3,600 gross per year can be made by individuals with no tax due. If you can make larger contributions then do so because you will gain further tax relief, but you should seek professional advice to ensure the desired effect on your tax bill.
If you like to make charitable donations, cash donations to UK registered charities can extend your basic rate tax band, therefore, increasing the amount of your income that will be taxed at the basic rate. Be aware that if you have not paid enough tax to cover the amount the charity would claim on your donation, you will have to make up the shortfall.
"There are also many tax-efficient investments you can make!"
Programmes such as the Enterprise Investment Scheme (EIS), Seed Enterprise Investment Scheme (SEIS), Social Investment Tax Relief (SITR) and Venture Capital Trusts (VCTs) can be considered, but note that each has it's own annual limits. Where you meet the criteria, income tax relief of up to 50% is available.
Don't forget that returns from ISAs are not subject to Income Tax or Capital Gains Tax so these are certainly worth considering, especially as there are a range of different types of ISA available.
Remember that the unused annual exemption on Capital Gains Tax cannot be carried forward or back to different tax years so if you don't use it, you'll lose it. You and your spouse are entitled to the exemption so gifts between both of you prior to the disposal of assets are certainly worth considering.
And finally, Inheritance Tax has a £3,000 annual exemption for each tax year that you can use to make a gift without any IHT due. This can be carried forward, but only into the next tax year.
"Would you like to know more?"
When it comes to your tax planning, there are many reliefs and exemptions available. If you'd like to review your tax planning efforts, then do give me a call on 01908 774320 or click here to ping me an email and let's see how I can help you.
Until next time ... ROGER EDDOWES Business Godparent
More about Roger Eddowes ... | | Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach.
Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.
|
|
More blog posts for you to enjoy ... | | | | | | | | |
|