Personal Taxation

updated: January 22, 2010

It is important to be aware of your tax position and, for example, the tax implications for you of different types of investments, so that any tax for which you are liable is kept to a minimum. 

Income Tax is the tax that affects the greatest number of people.  We see our role in part as helping clients to reduce the impact of income tax on their finances. We also encourage clients to keep proper records so that they can more easily complete their annual self assessment form and protect themselves in the event of a Revenue enquiry into their affairs.  The Revenue may investigate a person’s tax affairs without cause, for up to five years and ten months after the end of the tax year.

There are particular issues for some clients, such as retired people avoiding a loss of 'Age Allowance', that are simple to achieve and can save wasting income on unecessary tax.

Capital Gains Tax can be avoided in most cases with proper planning, except where clients make very large gains, for example from the sale of a second property.

Most people do not realise that they can withdraw over £10,000 a year from the growth of their investments and that this is effectively a form of tax free income.

Inheritance Tax is again very much a voluntary tax in that there are many ways of removing its effect if proper planning is carried out in good time.

Timing

Tax is calculated in tax years which end on 5 April. It is important to bear this in mind when doing things that are likely to involve a tax charge. For example selling a shareholding on 8 March might involve you in a capital gain, whereas if you sold half of the shares on 8 March and the other half on 8 April (a new tax year), there might be no tax to pay.

Similar effects can be achieved by the correct encashment of a life assurance bond in some cases and it is always worth discussing such matters with us before acting.