Four tips for end of year tax planning
8 Feb 17
As the UK approaches the end of another tax year, Tony Müdd, divisional director for development and technical consultancy at St James’s Place, talks through how to make the most of all the allowances and exemptions available.
“Married couples and civil partners will get the best out of their personal allowances (set at £11,000 this tax year) and other allowances and reliefs if they plan their holdings so that both individuals are shielding the maximum from tax.
“The tax regime for CGT is relatively generous as every taxpayer has an annual allowance of £11,100. Gains above that are taxed at 20% for higher rate taxpayers (10% for basic rate) or 28% for residential property-related profits (18% for basic rate).
“If your spouse is not using their allowance you can transfer assets across – a procedure that is not subject to CGT. If you both then sell assets before the end of the tax year you can effectively double the allowance to £22,200. However, if you don’t exploit the allowance this year, it doesn’t roll over and is lost forever.
“The best solution is to structure your investments in as many different forms for tax purposes as you can. This and future governments may change how tax is applied, so using several wrappers is best.”
Tags: St James's Place
