2. Tax Planning
We appreciate that life is not always plain sailing. At some point in your life you may have to make some stressful and major decisions.
We are here to help with these decisions and steer you in the right direction.
Whether you’re deciding on whether to acquire a new business or a company purchase, acquire or sell a property, make a move abroad or stay in the UK, start a well-deserved retirement or continue working, or even decide on how best to pay school fees, we can talk you through the options. We can even support a marriage, separation or a divorce, or even support in planning for your eventual passing and how best to transfer your assets to your loved ones.
It is quite easy to make the wrong decision and as a result, you or your loved ones could suffer unnecessary harsh tax consequences.
At Telic, we can help you make the right decision and minimise your tax exposure with our tax planning services. Our knowledge of UK tax legislation ensures that you will be aware of the tax implications on the choices available to you before you get to the point where you must decide. At Telic we encourage foresight and forward thinking, and tax planning falls into those categories.
We would much rather you have to start a sentence with the words “I had the foresight to…” rather than “In hindsight, I wish I had…”
Most sales or transfers of gifts between spouses or civil partners do not give rise to a potential CGT liability. By transferring assets in this way you can take advantage of your combined CGT exemptions and especially of lower tax rates if the transferee is non-tax paying. It might also be sensible to split gains over two tax years, to make use of both years’ allowances.
Since the rate of CGT you pay is dependent on your income tax band, reducing your income tax rate can also have a knock-on benefit on your CGT.
A common method of reclaiming the personal allowance is to make a pension contribution to take your income to below the threshold at which you start to lose your personal allowance (being £100,000 – detailed here – find in FAQs)
Alternatively making a gift aid donation will also facilitate this process. This can be achieved even when the donation is made in the subsequent tax year.
However, generally planning is key before the tax year of relevance is over.
If you live with a spouse or civil partner and have jointly held property, you can change the split of property income to your actual share of ownership. This is useful when one individual has a lower marginal tax rate, and therefore the overall tax paid by both parties is lower.
If, for example, there is an 80:20 ownership, you’ll need to provide evidence that your beneficial interests in the property are unequal (via a declaration or deed), and complete a Form 17 accordingly.
In summary, a Form 17 should be completed if you own a property in unequal shares and you wish to inform HMRC that you wish to be taxed on that basis.
When you marry, any existing will is automatically revoked (cancelled) and becomes no longer valid. If you do not make a new one, then when you die the law of intestacy decides how your assets are divided.
If your marriage is ended by a court order (like divorce or annulment) your will is not void or invalid. So it is best to make a new will immediately after your divorce, especially if your spouse or civil partner was a beneficiary or a trustee.
Each year you personally can contribute up to 100% of your relevant UK earnings (a minimum of £3,600) into a pension or the annual allowance (whichever is lower) and receive tax relief.
If you have any questions or need further advice in this area, please get in touch and we will be happy to discuss further