insideKENT Magazine Issue 36 - March 2015 | Page 147
BUSINESS
PLAN NOW TO
MINIMISE YOUR
2014/15 TAX
THE END OF TAX YEAR 2014/2015 IS LOOMING, BUT THERE’S STILL TIME TO MAKE
SURE YOU’RE ON TRACK TO MINIMISE TAX FOR THE CURRENT YEAR. THE
FOLLOWING TIPS SHOULD HELP YOU ON THE WAY TO EXAMINING WHAT YOU
CAN POTENTIALLY DO TO KEEP YOUR TAX BILL AS TRIM AS POSSIBLE.
Your pension provision is important for your future
and can reduce your tax burden today. Utilise
your employer contributions to build a retirement
fund. Personal contributions to pension schemes
attract tax relief at your highest rate. For tax relief
against your 2014/15 income, you must pay
pension contributions on or before 5th April 2015.
The basic annual allowance cap on pension
savings is £40,000 for 2014/15.
The proposed pension legislation changes – that
at the time of writing have not yet been confirmed
– may make a difference to the amount you can
put into your pension scheme. It is proposed that
if you start your draw down post 5th April 2015,
your annual allowance for contributions will be
capped at £10,000; however, if you start prior
to 5th April 2015, even drawing down a nominal
amount, you retain the £40,000 annual allowance.
You should speak to your IFA about this.
Utilise your Capital Gains Tax allowance – when
you dispose of assets, only the profit is taxable
(the ‘gain’). For individuals, gains in 2014/15
under £11,000 are tax-free. For married couples,
that’s a total of £22,000 of tax-free gains each
year to take advantage of.
Interest earned on cash NISAs is tax-free – you
don’t have to declare them on your tax return.
Higher-rate taxpayers don’t have to pay any
further tax on dividends from investments and
there is no capital gains tax to pay when you sell
shares or units held in a NISA.
From 1st July 2014, the New Individual Savings
Account (NISA) allowance rose to £15,000. From
6th April 2015, it has increased again to £15,240
and can be utilised as all cash, all stocks and
shares, or alternatively, it can be split between
the two. This means married couples, for example,
could put up to £30,000 between them into
NISAs this tax year (before 5th April), and a further
£30,480 from 6th April.
Parents can also utilise Junior NISAs, which have
replaced Child Trust Funds. Consider using them
as a long-term savings option for a child’s future
and a very tax efficient way of making gifts to
them. In the tax year 2014/15, the Junior NISA
allowance is £4,000. This will increase to £4,080
in April 2015.
Married couples should consider transferring
assets between them. The rules are complex
and no one size fits all, but seek advice, as there
may be benefits for income tax, capital gains tax
and even inheritance tax. HMRC can make
mistakes, so check your payslip details. Check
that your name, address, National Insurance
number, employer’s name and your tax code are
all correct.
and if the nil-rate band is not used on the first
death, it can be used on the second death.
Look into Gifting and Lifetime Transfers, as well
as writing your assets into Trusts; the rules are
complex, so seek professional advice. Life
assurance can be used as a way of removing
value from an estate, and as a method of paying
inheritance tax liabilities.
However, if it all seems like a maze, a good
accountancy firm – like Wilkins Kennedy – can
help you look at your particular circumstances
and create a plan. In fact, if you are looking into
ways you can improve your tax planning for 2015,
then you might like to know about the WK yearend tax planner, which can help you plan for all
the upcoming tax deadlines for the year ahead.
This is available now at www.wilkinskennedy.com,
or alternatively you can contact Wilkins Kennedy
for a hard copy – just get in touch.
Don’t forget that age pays. If you were born
before 6th April 1948, check if you are eligible
for an increased personal allowance.
If you give to charities, be Gift Aid aware. The
scheme enables charities to reclaim tax on any
donations made by UK taxpayers. In turn, there
are benefits to certain individuals – for instance,
people over 65 and higher rate taxpayers.
There’s scope to minimise Inheritance Tax (IHT)
too. The current allowance is £325,000. IHT only
applies above this threshold and at a rate of 40%.
Transfers between married couples are exempt
from inheritance tax, inter-spouse gifts made in
the seven years prior to death can be ignored,
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Email Partner, Rick Schofield, at
[email protected] or
call on 01233 629255.
www.wilkinskennedy.com