TRUSTS & WILLS
Nearly every one we have ever met is concerned about the amount of tax they pay, and understanding why. This can vary from the young person starting out on their career to senior employees and business persons about to retire.
The public perception is that our tax system is indeed very complicated and every attempt to simplify it seems to result in more arcane rules and more tax for the revenue. Great for tax professionals, not so great if your the tax payer!
Good tax planning is about organising your affairs so that you minimise your liabilities by taking advantage of the many allowances that are written into the system. This is particularly true when it comes to planning your investments and savings. For instance is it better to have most of your gains taxed to income tax or treated as a capital gain?
Income tax - make sure you are using your personal allowances to greatest effect. Make sure your PAYE code is correct as many are not. Can any income be shifted to a partner paying a lower tax rate? Sometimes profits can be crystalised at a later date when they are subject to less tax.
Capital Gains - make sure you are planning to use the exempt gain allowed each year. Transfers can be made between spouses free of immediate CGT. This could potentially double your usable exempt gain.
Inheritance tax - use your allowances such as they exist - most people don't. Be careful about domicile the usual exemptions may not apply to you. Use trusts if you want to pass on gifts to the next generation yet retain some control. The earlier you start thinking about this subject the better!
Corporation tax - if you are self employed have you considered setting up a limited company and checking out if corporation tax rates would mean being taxed at a lower rate.
A trust allows you to make provision for beneficiaries and loved ones either during your lifetime or via your will on death. Trusts also have their own unique set of tax rules which may provide scope for planning in minimising your liabilities to the revenue.
Trusts can also be useful in protecting assets when long term care calculations are made. Such provision should be made well in advance of any medical problems that might arise.
Your will should be kept up to date and reviewed regularly as tax laws are changed and your personal circumstances evolve.
We can help you plan your requirements and liaise with other professionals.
Please contact us for further advice on tax planning