Successive governments have successfully implemented complicated legislations which mean that one’s earnings, investments, capital gains and estate are heavily taxed, during your life and on your death. Many people are unaware of a myriad of legitimate solutions, approved by Her Majesty’s Revenues and Customs (HMRC) which, with our advice, can dramatically reduce the amount of tax you pay.

Some Ways of Paying Less Tax

  • Effectively using your annual ISA allowances
  • Effectively using pension allowances
  • Pension Planning 
  • Spousal Transfers
  • Potential Gift’s out of Income (PETS)
  • Investing in Business Property Relief 
  • Investing lump sums into Discounted Gift Trust’s (DGT) 
  • Efficient Capital Gains Tax Planning (CGT) 
  • Selling Investment’s


Inheritance Tax

Without very considerate planning and advice, HM Revenue & Customs are likely to be the single largest beneficiary of your estate on your death. When we spend decades, growing a client’s investment portfolio, the last thing we want to do is sell the portfolio on death for the majority to be used to pay the current 40% Inheritance Tax bill, chargeable to your estate. Currently, the first £325k for every person, is chargeable at 0%, and at 40% thereafter, on the remainder of the estate. A new phase has been introduced called Residence nil rate band (RNRB) which can be claimed in addition to the nil rate band when the person disposes their interest in a residence to a lineal descendant, e.g. a child or grandchild.

The threshold will increase as follows:

£100,000 for the tax year 2017/18
£125,000 for the tax year 2018/19
£150,000 for the tax year 2019/20
£175,000 for the tax year 2020/21

For many people, the allowances will not make much of a difference, and a substantial amount of IHT will be payable regardless of this recent addition.

IHT is a ‘legitimately avoidable’ tax, when advice can be given to combat it. Last year, the Telegraph stated £1.8b of additional IHT was forecasted to be taken by the treasury in 2017.  “Rising House prices and a booming stock market were named as the causes of the increased tax haul. IHT, known as the ‘most hated tax’, generated in 2016/2017 approximately £4.7b, set to rise to £6.2b in 2021/2022, an increase of around a third. Many people begrudge being taxed on their estate which they pass along the generations because it has after all been bought out of taxed income in the first instance. Dia Chakrvarty Political Director at the Tax Payer’s Alliance said, “IHT is a terrible tax which hits grieving families at the worst possible time and punishes the very basic human instinct of wanting to leave something behind.”

To find out how to reduce your IHT bill and leave the majority of your estate to your heirs intact, please enquire below.
 

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