Time to iden­tify tax plan­ning op­por­tu­ni­ties?

Leek Post & Times - - BUSINESS WEEKLY - Ad­vice col­umn From Brian Mellor Fi­nan­cial Ser­vices Oliver Mellor Dip PFS, BA (Hons)

ALTHOUGH the cur­rent tax year does not end un­til April 5, tax plan­ning shouldn’t be a mad March rush.

Now is the per­fect time to get a head start on your tax plan­ning res­o­lu­tions to en­hance your own, your fam­ily’s or your com­pany’s tax-ef­fi­cient plans for the fu­ture.

We have set out some tax tips and ac­tions that may be ap­pro­pri­ate to cer­tain tax­pay­ers. Re­view­ing your tax af­fairs now will en­sure that avail­able re­liefs and ex­emp­tions have been fully utilised, to­gether with fu­ture plan­ning which could help to re­duce your tax bill.

It is im­por­tant to en­sure that, if you have not done so al­ready, you take the time to carry out a re­view of your tax and fi­nan­cial af­fairs to iden­tify any tax plan­ning op­por­tu­ni­ties and take ac­tion be­fore it’s too late. Per­sonal cir­cum­stances dif­fer, so if you have any ques­tions or if there is a par­tic­u­lar area you are in­ter­ested in, please con­tact us.

▶ Pen­sion con­tri­bu­tions – spouses and chil­dren – con­sider con­tribut­ing up to £2,880 to­wards a pen­sion for your non-earn­ing spouse or chil­dren. The Gov­ern­ment will add £720 on top – for free.

▶ In­di­vid­ual Sav­ings Ac­counts (ISAS) – fully utilise your tax-ef­fi­cient ISA al­lowance. The al­lowance for 2018/19 is £20,000 per per­son, whilst the Ju­nior ISA al­lowance is now £4,260 for chil­dren un­der 18.

▶ Cap­i­tal gains – use the cap­i­tal gains an­nual ex­emp­tion of £11,700 (2018/19) to re­alise gains tax-free. The al­lowance can­not be trans­ferred be­tween spouses or car­ried for­ward.

▶ Pen­sion con­tri­bu­tions – max­imise con­tri­bu­tions amount and tax re­lief. Take full ad­van­tage of in­creas­ing pen­sion con­tri­bu­tions by util­is­ing the an­nual al­lowance, which is £40,000 (tapered if you earn over £150,000) or the value of your whole earn­ings – which­ever is lower. Un­used an­nual al­lowances may also be car­ried for­ward from the pre­vi­ous three tax years.

▶ Re­mu­ner­a­tion strat­egy – if you run your own com­pany, it’s a good idea to de­ter­mine your pay and ben­e­fits strat­egy sooner rather than later. For 2018/19, the div­i­dend nil-rate band is re­duced from £5,000 to only £2,000 – it’s re­ally im­por­tant to con­sider the tax im­pli­ca­tions of your cho­sen ap­proach to salary, ben­e­fits, pen­sions and div­i­dends.

▶ Gift­ing – you can act at any time to help re­duce a po­ten­tial In­her­i­tance Tax bill when you’re no longer around. Make use of the In­her­i­tance Tax an­nual ex­emp­tion that al­lows you to give away £3,000 worth of gifts out­side of your es­tate.

In­for­ma­tion based on our cur­rent un­der­stand­ing of tax­a­tion leg­is­la­tion and reg­u­la­tions. Any lev­els and bases of, and re­liefs from, tax­a­tion are sub­ject to change. Tax treat­ment is based on cir­cum­stances and may be sub­ject to change in the fu­ture.

Although en­deav­ours have been made to pro­vide ac­cu­rate and timely in­for­ma­tion, we can­not guar­an­tee that such in­for­ma­tion is ac­cu­rate as of the date it is re­ceived or that it will con­tinue.

No in­di­vid­ual or com­pany should act upon such in­for­ma­tion with­out re­ceiv­ing ap­pro­pri­ate pro­fes­sional ad­vice af­ter a thor­ough re­view of their par­tic­u­lar sit­u­a­tion.

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