Income tax planning

Basic considerations should include transferring ownership of assets to your spouse or joint ownership or use of joint bank accounts to achieve a spread of income which satisfies maximum use of joint personal allowances. Extra emphasis should be placed on a spread of ownership of investments to make full use of lower tax rates.

Similar principles can be applied to use of children’s income, whereby each child is entitled to a personal allowance of £9,440 (rising to £10,000 next year). Ignoring the child’s allowance means that any funds put aside by family members for a child’s benefit may be taxed at a higher rate.

If you happen to be close to an income threshold, use of deductions to reduce income may be appropriate. For example, you may be able to claim income tax deduction through charitable donations using Gift Aid. Pension contributions are also an excellent way of mitigating income tax. For risk tolerant investors, specialist investments such as EIS, SEIS & VCT can give valuable tax reliefs.

Notice: Trying to access array offset on value of type null in /home/milfordanddormor/public_html/wp-content/themes/milfordanddormor/includes/content-single.php on line 179
Matthew Clark