The end of the tax year approaches!
Here is a quick checklist of things you should look at before 5 April. It is not exhaustive and, of course, all financial planning should be done with proper professional advice. Ask before you act!
Income Tax
If one of a couple is a higher-rate taxpayer and the other is not, moving income from the higher-rate taxpayer to the lower rate taxpayer will produce tax savings. In general, the nearer equal a couple's income is, the less tax they will pay. Gifting income-producing assets to a spouse is an efficient tax-planning technique.
Student Children
If you have children going to university and funds on deposit, consider gifting them the money as soon as they are 18. It may be worth setting up an educational trust fund to see your children through higher education. It may even be worth buying a house for them to live in!
Capital Gains Tax
If you have gains that are unrealised, consider selling shares to take account of the personal CGT limit. If you have realised gains and have some investments standing at a loss, consider selling the ones at a loss – it may reduce your tax bill. You can also gift assets subject to CGT to your spouse, allowing him or her to use their own CGT exemption.
If you have losses, realising them will make the loss available to set against future gains when they become chargeable.
Retirement Premiums
Payments into your pension plan will attract tax relief…if you are due to make a payment on account of higher-rate tax at the end of this month, you may be able to reduce the payment.
Deferring Gains
If you have capital gains, the tax on these may be able to be deferred through the use of a Venture Capital Trust or Enterprise Investment Scheme investment.
Reduced Profits
If your taxable profits or income are falling, you may be able to reduce oyur tax payment on account due at the end of this month. Take advice!