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BED AND SPOUSING – TAX PLANNING HAS NEVER BEEN SO EXCITINGMany people are paying far too much tax, often through lack of knowledge of the tax rules. For those keen to organise their finances in a tax-efficient way, the end of the tax year is an important deadline for maximising a number of opportunities.
Bed and breakfasting, where you sell shares and then buy them back again to take advantage of the £8,800 annual capital gains tax exemption, was rather unsportingly legislated against some years ago, but you might want to give bed and spousing a try! You sell the shares and your spouse buys them back.
If you want to reduce your tax bill by making pension contributions, you’ll need to do it before 5th April. Previously, pension contributions could be carried back, but that all changed from April 06, so you’ll need to plan ahead.
ISAs are still a very tax efficient method of saving, but again, you’ll need to act before 5th April to invest this year’s annual contribution limit of £7,000 – use it or lose it!
Recent changes in legislation have made inheritance tax planning far more difficult, and the government have made it crystal clear that they’ll act to neutralise any new schemes that are devised by over-enthusiastic tax planners. That makes it even more important to take advantage of the reliefs and exemptions granted by the inheritance tax legislation itself. A gift of £3,000 before 5th April will fall outside the inheritance net. And the one that gets overlooked, which can be even more beneficial – lifetime gifts out of income. These gifts need to be sorted out before 5th April each year.
If you’re in business and thinking of buying some plant and machinery, remember that small businesses can claim a 50% first year allowance on almost all purchases of equipment, other than motor cars, until 5 April (31 March for companies).
These are just a few tax planning points to consider before 5th April – there are many, many more. For some free bedtime reading, call (01423 560547) or email (j.purdy@dscca.com) for our tax planning checklist (58 tax planning questions and issues).
To discuss any aspect of your tax planning, please telephone Simon Pease, Managing Partner, DSC on Tel: 01423 560547 or email: s.pease@dscca.com.
