GeneralTAX For Individuals

Tax Planning with a Chartered Tax Advisor

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As your tax affairs become more complicated, not only will a chartered tax advisor ensure you pay the right amount of tax to HMRC, but they will also be able to provide you with ways to make tax efficient investments going forward and minimise your tax liability. This can vary from simple tax planning from utilising the ISA allowance, to more complicated trusts and inheritance tax planning. All in all, a tax advisor is likely to provide major benefits as your tax affairs become more complex.

  One piece of tax planning which is highly recommended is to utilise your ISA allowance each year (this currently stands at £5,760 for cash ISAs for 2013/14 and a further £5,760 in stock ISAs). This is because any interest, or dividends received will not be liable to income tax. Similarly any capital gain will not be liable to capital gains tax. As the ISA allowance cannot be carried forward, it is useful to use the whole ISA allowance each year. [caption id="attachment_464" align="alignnone" width="300"]Personal Tax Planning Strategic Planning can help you to reduce your income tax liability.[/caption] Another useful piece of tax planning would be to utilise your annual exemption. This relates to any capital gains that you may be subject to as a consequence of selling or disposing of assets. The annual exemption for 2013/14 is £10,900 meaning that the first £10,900 of capital gains you make will not be subject to capital gains tax. Any gain made above this will be liable to capital gains tax at either 18% or 28% (subject to your income tax rates). Similarly to the ISA, the annual exemption cannot be carried forward so it is beneficial to plan when you dispose of assets to use up your allowance.   More complex tax planning advice that your tax advisor may provide to you would be investing your money under the EIS or VCT Schemes. By investing in these smaller companies who are part of the scheme, as an investor, you will be able to claim certain tax reliefs. This could come in the form of income tax relief of up to 30% of your total investment, to other capital gains and inheritance tax reliefs. As these are more complicated, it is advisable to talk to your tax advisor about these in more detail.   If you have further questions about how Wisteria can help you with your personal tax returns, please contact us on 020 8952 0140 or email [email protected] where a tax advisor will be more than happy to help. Alternatively, click here.

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