With the current tax year having begun on 6 April 2020, the clock is ticking and it is important to utilise all the tax reliefs and allowances available before 5 April 2021 in order to minimise your liabilities.
Reducing your tax bill is not something that you’re taught about, meaning that many of us end up paying more tax than we should be.
Personal tax planning is something that our expert team at Thomas Coombs Wealth Management give great consideration to so that you can make the most of the reliefs and allowances available to you.
Individuals can contribute to their pension pots tax-free, providing they don’t go over the £40,000 annual limit.
They can also contribute a further £2,880 towards a pension for a non-earning spouse or child, saving them even more in tax.
This not only helps future-proof you and your family’s retirement income but also helps keep you out of the higher or additional rate tax bands.
Have you opened an Individual Savings Account (ISA) for you and your family?
The allowance for 2020/21 is £20,000 per person, meaning you can start generating interest tax-free from today.
Individuals can gift up to £3,000 of gifts each year to family and friends without incurring Inheritance Tax. Remember, this allowance can be rolled over by up to one year.
Employee benefits – be wary
Most employee benefits – such as company cars – are now taxable as regular income. If you don’t need a company car, substituting it for cash and contributing it towards your pension, for example, may be a more tax-efficient option.
All married couples in the UK are entitled to the Marriage Allowance, but very few are even aware it exists.
The allowance allows you to transfer £1,250 of your Personal Allowance to your husband, wife or civil partner, providing they earn more than you and are within the basic rate tax band.
To benefit, the partner transferring their allowance must normally have an income below the Personal Allowance – currently £12,500.
This can result in annual tax savings of up to £250 a year.
We’re here to help
At Thomas Coombs Wealth Management, we’re here to help you. We offer a range of tailored services that help you to plan and protect your private and corporate financial future, including tax planning, trust and estate planning, private investment, group pensions and corporate protection.
We understand that under difficult circumstances, nobody knows what the future may hold, which is why it’s essential to put effective plans in place.
Many individuals may be reviewing their financial position as we begin the New Year, ready to implement changes in 2021 ahead of the tax year-end.
We would be delighted to have the opportunity to discuss your situation with you to help you manage and preserve your wealth with an advisor that you can trust and rely on.
This article is for information only and should not be construed as advice or a recommendation to act. Investments can go down as well as up and you may not get back the original capital invested.
The financial conduct authority does not regulate tax and estate planning.
Discover how we may be able to help you secure your financial future by calling our office on 0113 532 0400.