End of year tax mitigation

With recent research suggesting that 57% of UK tax payers are failing to plan to mitigate their impending tax liabilities.
If you are a Ltd company Director paying yourself a low salary & dividends, it may be worth paying yourself a special dividend payment prior to 6th April 2016 as dividends will then be subject to a new income tax regime from HMRC.
Reduce your Income Tax bill by paying additional contributions into your pension (subject to pension contribution limits).
Reduce your Corporation Tax bill by making company pension contributions (subject to trading year and corporation tax payment timings).
Delay selling assets to a time when any capital gains tax (CGT) has to be paid, better still why not defer the charge all together and invest the liability into an Enterprise Investment Scheme (EIS). You can carry on rolling into new EIS schemes to defer indefinitely, you can enjoy income tax relief of 30% on the initial contribution (assuming the tax has already been paid) up to £300,000 relief can be claimed plus the previous tax year relief of up to £300,000 giving a potential income tax saving of £600,000. You can enjoy CGT deferral & CGT free growth achieved in the fund (not guaranteed). In the event of death the holding will be Inheritance Tax (IHT) free if held for 2 years prior to death due to the benefit of Business Property Relief (BPR).
For people who may be fully funding pensions, or want to extract cash from their business invest into a Venture Capital Trust (VCT). You can receive up to 30% income tax relief on investments of up to £200,000 per annum, and not exceeding the tax you are due to pay in the year of investment. You can also take dividends from the VCT tax free, sales of shares will be CGT free (if sold within 5 years the Income Tax relief will be withdrawn).
One trick is to set up seperate VCT’s one per year from year 1 to year 5 in year 6 you can either sell the year 1 VCT tax free or roll it into a new VCT & enjoy another 30% income tax relief, (subject to the current limits stated above).
Inheritance Tax (IHT) is largely a voluntary tax for advice on how to mitigate IHT or further advice on any of the issues above call me on 01296 641968.
Please Note;Tax laws are always subject to change.

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Please note when reading any information on this website: past performance is no guide to future performance. The value of an investment may go down as well as up and an investor may not get back the full amount invested. Before investing, please ensure that you have read the information set out in the simplified prospectus, which includes full details of the charges. Any material available is directed only at persons in the UK and is not an offer or invitation to buy or sell securities. Opinions expressed on this website represent the views of Stephen Baker Financial Consultants Ltd at the time of publication, are subject to change, and should not be interpreted as investment advice.

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