Capital Taxes

CAPITAL GAINS TAX

Both these taxes are rare for the average person, but painful when they bit.

We can look your potential situation and advice accordingly.   BUT one of the biggest problems is that best advice in respect of one tax is often the wrong advice for the other !

If you have slowly built up a business over the years, reinvesting profits, rather than adding to your pension pot it is some what annoying when you may end up paying up to 28% of the profits to the taxman.

Careful planning a few years ahead of time can help with this but, as with all capital tax planning, this can conflict with other taxes.   For instance drawing a rent on property owned by you and used by the business may well save many years of NIC, but might then stop the relief available as a businessman when you come to sell the property.

Rental properties are the other big area, with no special exemptions available, planning the ownership of the property, and the timing of a sale, can be potentially crucial to keeping the tax burden under control.

The interaction of all these taxes needs careful planning.

 

Inheritance Tax

A tax that all of us will, one day, have to tick a box about  ( or your executors will anyway !)

Tax planning has often been simple, and it still is.   BUT there are often consequences,   The most easy planning is to give stuff away and live 7 years.  But can you afford it? 

You cannot give away your house, and remain in it, so unless you have large investments or cash balances one needs to be a bit cleverer.

To undertake advice on this subject we would insist on a legacy plan as a way of getting a full picture of the family finances (no wills/trusts etc. need to be paid for but it is a very good way of identifying the needs and concerns of you and your family).

To balance the need to control assets into retirement the use of trusts may be required, (they are nowhere near as scary or costly as you might imagine).   But also regular gifts could be set up and amending pensions/life insurances etc… could all help in reducing your estate’s final tax liabilities without risking poverty into retirement !

We cannot emphisise enough that the majority of your attention should focus on what happens to your estate (the majority of your wealth) before worrying about the minority (the potential tax payment).

See the legacy planning page for further information.