There are many ways to save tax. When we assess your overall financial position, one of the key elements of our planning will be to ensure that your arrangements are tax-efficient.
Make sure that the married couple's allowance goes to the person in the highest tax band (Note: only available if one partner was born before 6th April 1935).
Make sure that non-taxpayers are invested in areas where they either get paid without deduction of tax, or can reclaim any taxes that have been paid.
Make sure that where a couple have investments, the income from those investments is classed as belonging to the partner in the lowest tax band. This can produce significant savings.
For higher rate taxpayers, seek to ensure effective use is made of any tax breaks and gross-paying, tax-free investments.
Maximising pension contributions where relevant, producing instant savings through tax relief on your contributions. Consider also funding pensions for partners.
Errors in the tax calculation. It is fair to say that for people whose tax affairs are simple (i.e. all dealt with through PAYE) errors are neither common nor significant. However for those whose affairs require them to complete self assessment forms then errors do occur and it is worth having the figures checked.
Capital Gains Tax Saving Tips
Moving assets across into investments that are exempt from capital gains tax.
Timing disposals to spread across more than one tax year whenever possible. (This means that part of the gain is taken in one tax year, and part in the next, allowing you to use two sets of CGT Exemption. An example of such might be selling shares in blocks to fund a property purchase).
Transferring assets from an asset-rich to asset-poor spouse, so that both exemptions can be used in future encashments.
Careful selection of which assets to sell in order to minimise tax or generate tax-free income. (for example, all things being equal, using the exemption to dispose of those with the highest potential gain can be very effective).