5th April 2014 – Last Minute Tax Planning Top Tips
As the tax year comes to an end, there is still time to save for 2013/14 and here are our top five tips:
Maximise Your Pension Contributions
A pension remains one of the most tax-efficient vehicles for long-term saving, particularly for higher rate taxpayers who can receive additional tax relief.
There is the additional prospect of saving National Insurance, 12% for employees and 13.8% for employers.
Transfer savings of up to £11,520 (max £5,760 in cash) into a tax-free ISA to reduce income and capital gains tax.
Venture Capital Trusts (VCT) & Enterprise Investment Schemes (EIS)
Venture Capital Trusts (VCTs) and Enterprise Investment Schemes (EISs) give 30% Income tax relief up-front. EIS’s also provide relief from Inheritance tax after just 2 years and Capital Gains Tax deferral.
Whilst you will require assistance in choosing an appropriate VCTs or EIS, they can form a valuable base to minimise Income tax, Inheritance tax and Capital Gains Tax.
Personal Tax Planning
Where one spouse is a lower/basic rate taxpayer, ensure that best use is made of personal allowances, age-related personal allowances and the CGT Annual Exemption of £10,600. This may involve transferring income generating assets to the spouse.
With the Inheritance Tax Nil Rate Band now frozen at £325,000, ensure that gift allowances are maximised and any outright gifts or gifts to trusts are made to start the 7-year clock running.
Should you require further information on any of the above then please contact the tax team on 0161 249 5040