Keeping you informed
Martin Aitken & Co has launched a Tax Planning for Life guide, which aims to encourage you to consider some of the issues that will face you and your
business in 2014. There are only a few weeks until the 2013/14 tax year ends on 5 April 2014 and, if you have not already done so, now is the time to
consider tax planning in order to secure future growth, stability and peace of mind.
The guide navigates you through planning strategies for all stages of life, from childhood to retirement. Here are the highlights:
Tax planning for children
While it may seem strange to consider tax planning for the kids, your offspring provide you with an opportunity to shelter family income from the taxman.
If grandparents have sufficient disposable income, consider asking them to make regular donations to the grandkids. This removes the financial burden from
you whilst at the same time reducing the grandparents’ Inheritance Tax (IHT) bill. Or consider setting up and transferring the asset(s) into a trust. With
a little planning, this can be undertaken with no capital gains tax (CGT)/IHT consequences and it also reduces your IHT estate.
Marriage/civil partnerships
The ‘institution’ of marriage/civil partnerships offers a unique opportunity for tax planning. These include the transferring of assets between couples
without any CGT/IHT liabilities and, in the case of IHT, any unused portion of the £325,000 Nil Rate Band can be passed to the surviving partner on
the death of the first spouse/civil partner. Consideration should be given towards employing a non-working spouse in your family business and paying them a
salary up to the Personal Allowance. This brings additional tax free income into the marital/civil partnership unit and a business tax deduction too.
Business/working life
Some strategies are suggested that could both reduce your tax burden and maximise profit. Examples include flexible remuneration packages, where
Owner-Managed Businesses (OMB) have the advantage of greater flexibility with dividends having a lower income tax rate and not being subject to NICs.
Consideration should also be given to salary sacrifice schemes in return for pension payments or non-taxable benefits, such as workplace nursery vouchers.
There have recently been some changes to company car legislation, increasing the importance of low CO2 emission vehicles. It’s worth considering charitable
contributions made by you (or by your business) as these benefit from tax relief.
Investments
Our financial services team provide many examples of how you can maximise your investments. With our relatively high income tax rates, it’s worth
converting your income into capital to access the preferable 18/28 per cent tax rates when the asset is eventually sold.
Property investments are the best example of this, with the added benefit of an income stream from buy-to-let, for example. (Buy-to-let mortgages are not
regulated by the FCA). Even if the asset is sold at a loss, this can be relieved against current and future gains. There are a number of attractive
investment wrappers which offer important CGT as well as income tax savings. You should review your investments to ensure that the tax wrapper changes and
funds are still in keeping with your objectives and appetite for risk.
To download a full copy of the tax guide go to http://www.maco.co.uk/tax-planning-life where you will find many other areas that you should consider for you and
your business.
Martin Aitken & Co Ltd is a leading Chartered Accountancy and Business Advisory firm with a specialist dentistry team.
If you would like to talk to us about any issues outlined, please call us on 0141 272 0000 or email our Dentistry Partners Jayne Clifford, on
, or Stephen Neville, on
Martin Aitken Financial Services Limited is a wholly owned subsidiary of Martin Aitken & Co Ltd. Martin Aitken Financial Services Limited are
authorised and regulated by the Financial Conduct Authority. Tax planning is not regulated by the Financial Conduct Authority.
The small print
Some Inheritance Tax planning solutions are not regulated by the Financial Conduct Authority.
This article is intended to provide a general review of certain topics and its purpose is to inform but NOT to recommend or support any specific course of
action.
All statements concerning the tax treatment of products and their benefits are based on our understanding of current tax treatment and HMRC practices, both
of which are subject to change in the future. Levels and reliefs from taxation are also subject to change.
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