Tax Planning
General financial information that you may be useful when dealing with certain life events.
TAX PLANNING IS NOT REGULATED BY THE FINANCIAL CONDUCT AUTHORITY
TAXATION - INFORMATION IS BASED UPON OUR CURRENT UNDERSTANDING OF TAXATION LEGISLATION AND REGULATIONS. ANY LEVELS AND BASES OF, AND RELIEF FROM TAXATION, ARE SUBJECT TO CHANGE.
TAX TREATMENT DEPENDS ON THE INDIVIDUAL CIRCUMSTANCES OF EACH CLIENT AND MAY BE SUBJECT TO CHANGE IN THE FUTURE.
Capital Gains Tax.
Individuals are entitled to an annual exemption. If you think that your investments have made substantial gains and you have not yet made use of your annual allowance, you should consider taking financial advice as you may be able to utilise your annual allowance, or reinvest in an ISA (subject to the ISA limits).
Taxation.
Income Tax is a tax you pay on your income. You don't have to pay tax on all types of income. You pay tax on things like: money you earn from employment, most pensions, interest on savings etc.. You don't pay tax on things like: income from tax-exempt accounts, Individual Savings Accounts (ISAs) and certain state benefits such as Personal Independence Payment.
Civil Partnerships.
Couples who have signed a civil partnership are treated by HM Revenue and Customs (HMRC) the same as a married couple. A civil partnership must be registered in order to fall within the new rules.
Inheritance Tax.
The Inheritance Tax threshold remains unchanged for 2022/23 at £325,000, whilst the residence nil rate band has increased to £175,000. This means individuals (with direct descendants) may be eligible for the additional residence nil rate band, so on death they can pass on more of the value of their estate, tax free, to their children or grandchildren.
The Residence Nil Rate Band is where each eligible individual can claim an additional inheritance tax allowance of £175,000 (tax year 2024/25), (reducing by £1 for every £2 that an estate exceeds £2,000,000) to offset the value of a family home on death, on top of their existing £325,000 inheritance tax exemption.
This Residence Nil Rate Band was set to £175,000 in 2021/22 and thereafter will increase with inflation each tax year. It can only be claimed where a main residence is passing to direct descendants on death and the amount can't exceed the property value.
