Personal tax

For many, taking care of themselves and their family means providing as high a standard of living as they possibly can with the income available. Unfortunately, our tax obligations sometimes make that harder than it ought to be.

With careful planning, however, your personal tax bill can be reduced. For instance, making full use of the capital gains tax (CGT) allowance can save you money in tax on the sale of assets, including residential properties.

Taxes and tax credits are the Government’s way of rewarding and punishing certain behaviours. That’s why alcohol and cigarettes are taxed, for instance. But you can use that to your advantage. For instance, you can get tax credits when you contribute to a pension, because that’s what the Government wants you to do.

Other tax reliefs include gifts made to family members during your lifetime, which can help reduce your estate’s inheritance tax bill after you’re gone. Getting this right takes some careful planning, though, for obvious reasons.

The self-employed are perfectly placed to benefit from careful tax planning. For example, company directors can pay less tax than usual by staying below the personal allowance for income tax and topping up their wages with dividend payments, which are taxed at a lower rate than income.

Reach out to us to see how else we can help with your personal tax planning.