Year End Tax Planning
With the end of the 2021/22 tax year approaching, we advise our clients to take the time to ensure that they are utilising all available tax reliefs and allowances in order to benefit fully from them, or simply to minimise liabilities. BRI can help with this, either directly or by working alongside other trusted advisers you may have, such as your accountants.
The fall-out from the enormous economic costs wrought by the pandemic will need reducing and repaying over time. We have already seen certain tax increases announced and allowances frozen for years to come. The immediate future is likely to see other changes introduced; so, with this in mind, planning prior to 5th April makes sense.
Personal Tax
The annual Capital Gains Tax exemption is £12,300 (£6,150 for trusts). Losses from current or even earlier years can be used to offset gains, and interspousal transfers to maximise exemptions should be considered.
There are also a number of annual Inheritance Tax allowances that can help reduce potential IHT bills.
ISAs – a Reminder
Each adult can invest £20,000 per annum (£40,000 per couple) meaning that £80,000 could be invested within this flexible tax shelter, either side of the tax year. There is also the £9,000 allowance for Junior ISAs. Using retrospective ISA allowances after the end of a tax year is not permitted.
VCTs/EISs
These higher risk investments can offer significant tax advantages to appropriate investors. However, taking specific advice is always recommended.
Pay into your Pension section
Pensions are a very tax efficient way to invest for your retirement.
For the majority of individuals, you can receive tax relief which is earnings related up to a maximum of £40,000 contribution. It is also possible to boost the amount you pay into your pension, as any unused contributions over the previous 3 tax years can be “carried forward”.
You can also pay into a pension for your non-working spouse, children or grandchildren.
There are many individual circumstances to be taken into account with regards to offering pension advice. Contact BRI for a free initial consultation.
Business Tax
Business owners should assess the most tax-efficient method of remuneration: salary, dividends, or pension contribution. We work closely with many business owners and self-employed clients and can advise on this.
There are many other aspects for business owners to consider, particularly if they are considering selling the business in the future. Owners and their advisors should be ensuring that considered planning and the correct share structure are in place to guarantee the most efficient return.
We work closely with many business owners and self-employed clients. There are imminent changes to many taxation rates from National Insurance contributions through to Corporation tax increases. We are happy to offer advice in these areas.
We are simply highlighting a few areas for consideration before the end of the tax year. There are more, and too many to list; but feel free to raise any area with your usual BRI adviser or contact invest@brigroup.co.uk to request a meeting.