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Tax planning that lets you sleep at night

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“goes to show what is possible with a bit of forethought and structured advice.”

Having worked as a tax adviser for over twenty years the biggest frustration is never the increasing burden of tax legislation, nor indeed our friends at H M Revenue and Customs…..instead the biggest frustration is the “Man in the Pub”!

You know, that person who speaks to your clients, contacts and friends with the inevitable catchphrase – I never pay any tax – and usually because they’ve employed the kind of tax planning that even Gary Barlow would turn his nose up at!

Transparent and risk-free tax planning

Joking aside, putting a strategic tax plan in place for yourself and your family can however result in significant reductions in your tax bill, both now and in the future, but in a transparent and risk free manner, a million miles away from the sort of tax avoidance schemes used by the “Man in the Pub”. I call it tax planning that lets you sleep at night.

For example pension contributions of up to £40,000 per tax year can now be made and tax relief obtained at your highest tax rate. Couple this with the increased ability to access your pension pot as a result of the pension reforms introduced in the last Budget and suddenly a pension contribution sounds like a good thing.

The new ISA (NISA)

The introduction of the New ISA on 1 July 2014 means that you can now shelter £15,000 per year in a tax free environment….and believe it or not there are many people who are now millionaires simply by using their ISA or NISA allowance each year !

Investing in qualifying shares under the Enterprise Investment Scheme can generate an immediate tax repayment of 30% of the amount invested, and after two years will also qualify for business property relief so that they don’t count towards your inheritance tax bill – that’s another 40% saved. And to cap it all, if ultimately you sell these shares at a profit then the capital gains tax bill is nil.

If you have your own business or trading company then structuring that ownership in the right way can mean that the capital gains tax liability when you exit or sell that business is at the rate of only 10%.

Just a few ideas, but goes to show what is possible with a bit of forethought and structured advice. So next time the “Man in the Pub” comes up to you with details of his latest scheme, buy him a pint and tell him your strategic tax plan.