Taxation
Managing your affairs and saving tax
There is no simple answer as to how you can pay less tax but careful planning can reduce future taxation.
The three main personal taxes:-
Income Tax Naturally this is a tax on income and most of us will pay this tax in one way or another.
Employees are by way of a coding notice and tax deducted from their salary.
People who have retired or do not work and are subject to tax may receive a tax return form for completion each year. If you need help in completing these complicated forms then please contact us.
Capital Gains Tax Capital Gains are calculated in a different manner to income and Income Tax.
A range of exemptions and reliefs exist e.g. the annual exemption, indexation and taper reliefs.
Not all assets attract Capital Gains Tax e.g. your principal private residence, betting winnings, certain tax free investments.
This tax may apply on a disposal which may be by way of a sale or a gift.
If you dispose of any asset you should be aware of the implications of this and it is far better to check the position first with us before proceeding.
Inheritance Tax This is a combined gift and death tax.
Most gifts made during lifetime will not attract an immediate charge. Gifts made more than seven years before death are normally exempt from tax.
On death, all assets including the value of the deceased’s joint property, any lifetime gifts and the value of any Trusts or Settlements to which the deceased was entitled during their lifetime are potentially subject to tax.
The first part of an estate known generally as the “nil rate band” is free of tax but any surplus will be subject to Inheritance Tax. Gifts to your spouse, to charity or if the estate contains certain types of assets, then this may affect the amount of tax payable.
If you have any tax problems then please contact Dennis Morrison or Michael Parr.