With just a few weeks left before the end of the 2014/15 tax year on 5 April 2015 here’s a few tips to keep more money in your pocket:
Keep out of the high tax danger zones
£50,000 – £60,000 – If you get child benefit then you get it clawed back in this zone. This means paying 40% tax plus the Higher Income Child Benefit Charge. A tax rate of over 60%
£100,000 – £120,000 – you’ll lose your personal allowance in this band. A tax rate of 60%
Over £150,000 – you’ll pay tax at 45%
Here’s a few things you can do…
Make pension contributions or Gift Aid payments to charities to reduce your total taxable income liability.
Get advice on transferring or splitting income and assets between spouses to equalise taxable income levels
Shift income to 2015/16 – where possible. Don’t forget that future tax years and allowances might be less favourable though.
Make sure your savings and investments are tax efficient
Here’s what you can do…
Use your tax-free ISA allowance before 5 April. The total investable amount for 2014/15 is £15,000 per person including cash ISAs.
Help your children – Junior ISAs are available up to a limit of £4,000 per child per tax year and can be funded by family members.
Talk to an IFA about whether investing in Enterprise Investment Schemes (EIS) or Venture Capital Trusts (VCT) to shelter income at higher rates and potentially defer capital gains tax (CGT) would be suitable for you.
Max out your pension
Still one of the best tax planning methods…
Use as much of your £40,000 annual contribution allowance for 2014/15 to save up to 45% tax.
Consider making a pension contribution for your spouse and children with no earnings and obtain tax relief.
If you have no pension provision, take advantage of this year’s allowances by setting one up before 5 April 2015.
Need more help? Just get in touch below.
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