Last minute simple tips to help you minimise your tax exposure
Published April 2010
Inheritance tax
Start giving away your cash, every tax year you can 'gift' away £3,000 that will not count towards your total estate and if you do not use the full exemption in one year, you can carry it forward but for just one year only. You can also make gifts of any amount of surplus income, although you must be able to prove that it is from surplus income and not capital funds.
Income tax
Why not look at giving a 'gift' to your spouse. For example you can make use of his or her income tax personal allowance, of £6,475, and basic/lower rate band, of £37,400, for 2009/10. This is especially important if your income is likely to exceed £100,000 or even £150,000 in 2009/10, given the new rules about loss of personal allowance and the 50% tax rate.
Capital gains tax
You could make use of the capital gains tax annual exemption for 2009/10 of £10,100 for each individual, including your children. This would allow you to strip out gains for the future and spread any tax liability on the growth over a number of years. Also it may be worth selling shares if they have delivered losses because these can be set against any gains you may have made on other assets this year.
Use your ISA allowance
For the 2009/10 tax-year you can invest £7,200 in your equity ISA (or £10,200 from October 2009 if you are over 50), up to £3,600 of which can be invested in cash, or if you wish, you can invest the full amount into stocks and shares. Savings in ISAs grow free from the taxman's purse.
Finally, we have the new tax year to look ahead to, and with a potential change of Government it could be an interesting twelve months. If you have any tax problems now, or over the coming months please get in touch, and be assured that we will keep you up to date with any major changes that may be introduced following the general election.
All the best for a prosperous 2010/11!
