BEACON WEALTH MANAGEMENT LTD
- The Goose Is Getting Fat
Christmas is coming, The goose is getting fat, Please put a cheque, in the tax mans sack... It doesn’t rhyme, but then I never professed to be a poet. What I do know about, however, is the pain that people incur when tax is due, and with the increased trend for tax returns to be completed online over Christmas, more people are having Christmas tinged by the realisation of how much tax is due.
Tax evasion is of course illegal, but tax avoidance is not.
To this end the Government provide many allowances and exemptions as well as different taxes for different scenarios.
Neither I nor my company profess to be tax experts, but we do work for a number of wealthy clients for whom we arrange investments and make provisions to limit the liability.
It is surprising just how much tax is paid when it need not be, and how few take advantage of the Governments generosity.
Sometimes we need to call upon the assistance of an Accountant but find most situations just need planning by using the right investment vehicle or Trust, and by considering the ownership of the plan and beneficiary.
Sometimes even after careful planning, a large inheritance tax liability remains. This can be avoided via a 2 year flexible investment, or via a 7 year plan if time allows.
Some clients however prefer simply to do nothing to avoid tax and instead maintain total freedom to spend and gift; some of these will cover the tax liability by a life assurance plan, and others just do not care.
In addition some clients change their mind and want to have the option to do so. This means arranging plans that whilst outside the estate after 2 or 7 years are still accessible during and after this time.
I find so long as clients know their options they can make a decision.
Doing nothing without consideration is normally wrong especially when you consider just how much tax was due on both Cilla Black’s estate, and that of Princess Diana due to the lack of planning.
In addition to the allowances mentioned below there are other ways of saving such as Pensions, ISA’s (Individual Saving Account) (- allows individuals to hold cash, shares and unit trusts free of tax on dividends, interest and capital gains; replacing both Personal Equity Plans (PEPs) and TaxExempt Special Savings Accounts (TESSAs)), VCT’s (Venture Capital Trusts - a type of publicly listed closed-end fund) and EIS’s (Enterprise Investment Scheme, to gain access to venture capital investments - designed to help smaller higher-risk trading companies to raise finance by offering a range of tax reliefs to investors who purchase new shares in those companies) and each have certain tax advantages, and levels of maximum contribution. I will look at each of these in more detail on a future occasion.
This year, however, if your tax returns show more tax to pay, give some thought to next Christmas and plan before the end of this tax year. It was Theodore Roosevelt who said “Do what you can with what you have, where you are”.
Should you require financial assistance for pensions, savings, investments, mortgages, protection, long term care, employee benefits... contact the team at Beacon Wealth Management Ltd.
Tel: 01480 869466