A very important part of any financial plan is taxation planning. We can construct an asset allocation and advise o the investments to form part of the portfolio but the outcome will be enhanced if the investments are made in the name of the corect taxpayer and all tax reliefs and exemptions are utilised
There are three main taxes to consider:
- Income Tax
- Capital Gains Tax
- Inheritance Tax
In each case you need to ask yourself:
- Am I paying too much tax?
- Are there any reliefs I could claim?
- Are there any exemptions from tax which I am not utilising?
At Nicholls Stevens when we construct a financial plan we consider such matters as
are both the husband and wife making use of their total personal allowances ?
- If the clients are over age 65, are they makig use of the Age Allowance, could the investments be re-arranged to do so
- Have the cients used their annual allowances for a cash and stocks and shares ISA S?
- Is it appropriate to make any pension contributions in order to gain tax relief
- Depending on attitude to risk, is there an argument for investing in a VCT scheme in order to obtain tax relief
- Have the clients taken their annual CGT allowance
- What gifts have been made for IHT purposes
- Has the annual allowance been used for IHT purposes – can last year’s allowance be used
- Is there scope to use the gifts out of normal expenditure allowance
- If a member of the family is to marry soon has the gift in consideration of marriage been made for IHT purposes
- Have the clients invested money in the name of the person paying the lower rate of tax
In complex tax matters we work closely with the client’s other professional advisers