Whether you like or dislike paying tax, it is undoubtedly a necessary part of civilised society. The basics of everyday life would crumble if schools, hospitals and policing were left underfunded.
No one is expected to pay more than their fair share of tax. It is, however, perfectly legal to make use of your various annual allowances and to examine how legislation should apply to you to reduce any taxes due to a minimum. The difference between tax avoidance and tax evasion is straightforward; the tax authorities accept the former and quite rightly prosecute wrongdoers for the latter.
Some tax planning techniques include the following:
- Using your Individual Savings Account (ISA) allowances
- Claiming tax relief on annual personal and employer-sponsored pension contributions
- Sharing/transferring assets to your married partner
- Use of Capital Gains Tax allowances
- Reducing your Inheritance Tax liability
When building a financial plan, it is vital that the effect of any given strategy pays heed to any tax consequences that may arise. Whilst tax shouldn’t affect the stated objective or drive product selection, its impact will have a bearing on the net returns enjoyed.
Clients who benefit from our service attest to the value of an independent adviser who can look at their situation within the larger picture.
Please note: The Financial Conduct Authority does not regulate taxation advice.