Tax, Trust & Estate Planning
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 RELIEFS 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.
It's important to make sure you aren't paying more tax than you need to. Taxation can be very complicated and the rules, reliefs and allowances often change. This is where we can advise you.
Our UK tax year runs from 6 April through to 5 April. During which time everyone is required to pay an appropriate level of income tax on their earned income, which helps to pay for things like healthcare and education. As well as income tax, you can also be liable for capital gains tax on profits you make from any chargeable assets you have sold, or for tax on gifts you have made during your lifetime.
Trust Planning helps you to manage assets for the future, so that you can plan ahead and know that taxation is being mitigated.
Since trusts usually avoid probate, your beneficiaries may access these assets quicker than they might to assets that are transferred using a will.
As a consequence of increasing property prices more people than before have found themselves being caught liable to Inheritance Tax. If your estate is over the inheritance tax allowance when you die, it will also be subject to a tax, known as inheritance tax.
There are a wide range of investment products which are acceptable to HM Revenue and Customs and which enables investors to reduce their potential liability to either income tax or inheritance tax or both. Amongst these are Enterprise Investment Schemes and products designed to take advantage of Business Property Reliefs granted by the Government.
James Britton is an experienced adviser in this specialist area, having achieved the Enterprise Investment Scheme Association (EISA) Diploma and one of only a handful of Diploma Affiliate members of the EISA.
In many circumstances pension scheme death benefits do not count as part of the deceased's estate, and can be paid to the surviving spouse free of inheritance tax. However, a spousal bypass trust could assist in transferring remaining pension benefits to other beneficiaries without triggering an inheritance tax charge if set up on the original pension member's death.
Ultimately, financial planning will focus on what happens to the estate when you are no longer around, we can help by talking to you about the importance of making a will and the basics of Inheritance Tax. Should you then wish to find out more about estate planning and Inheritance Tax we can arrange an initial discussion.
Investments which form part of a deceased's estate are re-valued at the date of death, so if they are sold there will be no capital gains tax to pay on any profits.
Tax treatment depends on the individual circumstances of each client and may be subject to change in 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).
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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, like Individual Savings Accounts (ISAs) and working tax credits, though the dividends paid into an ISA account carry a 10% income tax credit which cannot be reclaimed.
See our Tax Tables »
The Individual Inheritance Tax Allowance for tax year 2014/2015 (and 2015/2016) is £325,000, including a small annual gift exemption which may be worth using if you are in a position to do so.
Certain lifetime gifts can be made without giving rise to an inheritance tax charge. For 2014/2015 (and 2015/2016) the annual gift exemption is £3,000 and small gift exemptions is £250. It is worth considering making use of these if you are in a position to. There are additional allowances for special gifts, for things like wedding gifts, charitable and political donations, and living cost assistance for children or grandchildren.
Venture Capital Trusts
These are designed to encourage individuals to invest indirectly in a range of small higher-risk trading companies whose shares and securities are not listed on a recognised stock exchange, by investing through Venture Capital Trusts. So, if you invest in a VCT, you spread the investment risk over a number of companies.
A VCT is only suitable for certain individuals. Please speak to a financial adviser before investing in these types of products.
Enterprise Investment Scheme (EIS)
The Enterprise Investment Scheme (EIS) is designed to help smaller higher-risk trading companies to raise finance by offering a range of tax reliefs to investors who purchase new shares in those companies.
An EIS is only suitable for certain individuals. Please speak to us before investing in these types of products.
James Britton has completed the Enterprise Investment Scheme Association Diploma qualification, the gold standard for alternative investment advice, so is well positioned to discuss, and assess the suitability of, this type of investment with you.
Spousal by pass trusts
Commonly the death benefits from a pension scheme are distributed to a surviving spouse and therefore an inheritance tax charge may occur on the death of the surviving spouse, when the assets are passed to the next generation. Spousal bypass trusts avoid death benefits passing directly to a spouse and so they will not form part of the spouse's estate.
THE FINANCIAL CONDUCT AUTHORITY DOES NOT REGULATE TRUSTS OR TAX PLANNING.
THE VALUE OF INVESTMENTS AND INCOME FROM THEM MAY GO DOWN. YOU MAY NOT GET BACK THE ORIGINAL AMOUNT INVESTED.