Tax efficient finances

Make the most of your tax allowances

There are a number of tax allowances granted to you by the Government. You have a personal income tax allowance, an annual exemption from capital gains tax and there are numerous tax credits available depending on your circumstances. Schemes like Gift Aid also offer relief, if you make donations to a charity. And you have an Inheritance Tax (IHT) allowance for when your estate is passed on.

Use tax efficient investments

On top of these there are also tax efficient investment products, such as Individual Savings Accounts and pensions. These are the straightforward ones and give you relief from both income and capital gains tax (CGT) to different extents. Other more complex or higher risk investments can extend the level of relief, depending on your situation.

Understand your tax liability and your exemptions

In addition, some individual assets that you own are also specifically exempt from CGT even if they are sold at a profit. Typically, these include your home, your car, certain personal jewellery, antiques and UK Government Bonds (gilts). In addition, there are ways to mitigate CGT, such as giving away assets to your spouse.

Plan for the next generation

For the 2015/16 tax year, your Inheritance Tax (IHT) allowance is £325,000 (£650,000 for married couples and civil partners), but anything you leave in your estate that takes the total above this amount will leave a liability. This can result in beneficiaries having to sell family heirlooms to pay the tax bill. However, a little bit of planning can help you access the range of annual exemptions and allowances which are available in advance. This can help you reduce the liability, or provide the means with which your beneficiaries can pay it without having to sell items of sentimental value.

Make the change

For most people, using your tax allowances could simply be a matter of adjusting your portfolio to maximise use of the various allowances and savings products. For others, the process is more complex.

Knights Noble can help you through the tax maze and help you find the best set of solutions for your personal needs.

For more information, please contact us so that we can outline the possibilities for you, without obligation.

Information is based on our current understanding of taxation and regulations. Any levels and bases of, and reliefs from taxation are subject to change. 

Tax planning is not regulated by the Financial Conduct Authority.