Year-end tax planning
Year-end tax planning
Many of our clients will be working hard to achieve their Big Picture, and before you know it, another tax year will have passed.
Whether that is growing your business, saving for retirement or passing wealth down to the next generation, there are plenty of opportunities to consider now ahead of 5 April 2019 which can help push you closer towards that goal.
Giving these some thought now will ensure that you maximise your own and your family’s allowances, reliefs and exemptions.
We know that many of our clients are busy driving their businesses forward, dealing with challenges head-on and adapting to the ever-changing business environment. With all of this going on, are you sure that you are extracting your hard-earned profits in the most tax-efficient manner?
A comprehensive remuneration plan will ensure that you are maximising your allowances and balancing the needs of your business. For example, are you taking advantage of the tax-free dividend allowance? Are you receiving the optimum level of salary to clock up a qualifying year towards your state pension and benefits, but without attracting National Insurance?
Talking of pensions...
Now is a great time to consider maximising contributions to your private pension. Tax relief on contributions has become somewhat of a minefield, and there are a number of traps to watch out for. We can help navigate you through these and ensure you are making the optimal level of contributions in the tax year.
The annual allowance is tapered for high-earning individuals, any contributions exceeding the annual allowance will receive no tax relief and you will be faced with an annual allowance charge.
Unused allowances from the previous three tax years can be carried forward, are you utilising these? Have you considered making pension contributions for your children? Maybe this could form part of your inheritance tax plan to start passing wealth down to the next generation….?
Did you see our article on gifting and IHT? Read this here or speak to your Creaseys contact for more information about making gifts and the IHT implications. You may want to take advantage of your IHT annual exemption before 5 April. Perhaps you are about to free up some cash from the sale of an asset that you would like to gift to family or friends?
Capital gains tax
Individuals can realise gains of up to £11,700 (in 2018/19) tax-free by utilising their annual exemption – this cannot be carried forward, so use it or lose it!
We regularly advise our clients around capital gains tax, including maximising reliefs available on disposal and planning between spouses/civil partners. You may want to consider transferring an asset to your spouse/civil partner to utilise their annual exemption, or you may want to delay a disposal until after 5 April to push the deadline for paying any capital gains tax due back a year.
Once you have sold the asset, you probably want to invest your cash in a tax-friendly environment...
Are you making full use of your ISA allowance? Individuals can save a maximum of £20,000 in an ISA, this could be either a cash or stocks/shares ISA, or a combination of the two. Junior ISA’s have an allowance of £4,260 this year.
Get in touch with your Creaseys contact on 01892 546546 to discuss how we can help you take advantage of these opportunities.
In our experience, tying your financial goals back to your Big Picture is a great way to help you gain clarity and really start making positive progress toward meeting your objectives.
Many of our clients have achieved their financial goals by speaking to Ben Waite at Creaseys Wealth – why not give Ben a call on 01892 546546 to discuss how he can help.