Braemar Wealth Management

Tax Planning

Here are our top 5 planning opportunities:-

Pension Contributions

Make a personal pension contribution and immediately obtain 20% tax relief at source and for those paying higher rate tax you can claim the additional 20% through your self assessment tax return. So you can turn £6,000 into a £10,000 pension contribution. How, you may ask?Contribute £8,000 into a pension, the government top this up by £2,000 (giving a total contribution of £10,000) and a higher rate tax payer can claim up to an extra £2,000 back via their tax return.

Individual Savings Accounts (ISA)

ISA rules are changing from 6 April 2008

From that date:

  • The annual ISA investment allowance will be raised to £7,200. Up to £3,600 of that allowance can be saved in cash with one provider. The remainder of the £7,200 can be invested in stocks and shares with either the same or a different provider.
  • ISA savers will be able to invest in two separate ISAs each tax year; a cash ISA and a stocks and shares ISA. Mini and maxi ISAs will no longer exist.
  • Mini cash ISAs, TESSA-only ISAs (TOISAs) and the cash component of a maxi ISA will automatically become cash ISAs.
  • Mini stocks and shares ISAs and the stocks and shares component of a maxi ISA will automatically become stocks and shares ISAs.
  • All Personal Equity Plans (PEPs) will automatically become stocks and shares ISAs
  • ISA savers will be able to transfer money saved in their cash ISA to their stocks and shares ISA

Venture Capital Trusts (“VCTs”)

These are not for everyone and are a high risk investment as the underlying investments must largely be in unlisted investments. The attraction of 30% tax relief may appear appealing but your fund choice is vital as not all VCT fund managers are the same. The maximum you can invest is £200,000 per tax year and in order to maintain the tax free status, the investment must be held for at least 5 years.

Enterprise Investment Schemes (“EIS”)

Again, these are not for everyone and are a high risk investment. Investors can obtain tax relief at 20% on the cost of subscribing up to £400,000 in 2008/2009 for shares in a qualifying unquoted company. The relief is subject to several conditions.

Capital Gains Tax (“CGT”)

Utilise your capital gains tax annual exemption – the first £9,600 (for 2008/2009) of an individual’s net gains realised during the tax year is free of CGT. Husbands and wives are subject to CGT separately, each with their own annual exemption and tax rates. Transfers between spouses living together are not liable to CGT.

If you would like to discuss any tax planning opportunities with James or David, please contact us on 0161 980 7981.

 

Braemar Wealth Management (NW) Limited is authorised and regulated by the Financial Services Authority. Braemar Wealth Management (NW) Limited is entered on the FSA register (www.fsa.gov.uk/register/) under reference 425022. The FSA does not regulate some forms of tax planning and investment structures.
Registered in England & Wales, number 05328421. Registered office – 38 Woodlands Parkway, Altrincham, Cheshire WA15 7QU