Tax Planning

We are all aware that the two certainties in life are death and taxes. What we can advise you on is how to mitigate some of your tax liabilities and reduce the amount of tax you might normally pay.

We advise you on your Income Tax, National Insurance Contributions, Capital Gains Tax and Inheritance Tax. We also make use of your annual allowances and reliefs where relevant.

Personal Allowances

Everyone who lives in the UK is entitled to an Income Tax personal allowance. This is the amount of income you can receive each year without having to pay tax on it. Depending on your circumstances, you may also be able to claim certain other allowances.

If you want to claim a tax refund because you didn't use your personal allowance (or for any other reason), you need to do so within five years from the 31 January following the end of the tax year concerned.

A tax year runs from 6 April to the following 5 April. So for the tax year that ended on 5 April 2005 you need to contact your Tax Office by 31 January 2011.

Other allowances to consider using during each tax year include:

Investments and savings into Individual Savings Accounts (ISAs) for either cash, stocks and shares or a combination of both.

Personal contributions into a pension plan to reclaim back Income Tax paid on your earned income.

Additional National Insurance Contributions to make up any potential shortfall in the State Pension

Gifts of capital to family members to reduce any potential Inheritance Tax liabilities

Capital Gains Tax

CGT is a tax on capital 'gains'. If when you sell or give away an asset it has increased in value, you may be taxable on the 'gain' (profit). This doesn't apply when you sell personal belongings worth £6,000 or less or, in most cases, your main home.

You may have to pay CGT if, for example, you:

sell, give away, exchange or otherwise dispose of (cease to own) an asset or part of an asset

receive money from an asset - for example compensation for a damaged asset

You don't have to pay CGT on:

your car

your main home - provided certain conditions are met

ISAs or PEPs

UK Government gilts (bonds)

personal belongings worth £6,000 or less when you sell them

betting, lottery or pools winnings

money which forms part of your income for income tax purposes

These are some points to bear in mind:

if you are married or in a civil partnership and living together you can transfer assets to your husband, wife or civil partner without having to pay CGT

you can't give assets to your children or others or sell them assets cheaply without having to consider CGT

if you make a loss you may be able to make a claim for that loss and deduct it from other gains, but only if the asset normally attracts CGT - for example you cannot set a loss on selling your car against gains from disposing of other assets

if someone dies and leaves their belongings to their beneficiaries, there is no CGT to pay at that time - however if an asset is later disposed of by a beneficiary, any CGT they may have to pay will be based on the difference between the market value at the time of death and the value at the time of disposal

Our addresses:

The Techno Centre,
Puma Way, Coventry, CV1 2TT

19 Sherbourne Place,
Clarendon Street, Lemington Spa,
Warwickshire, CV32 5SW

Office Hours:

Monday to Friday 9am to 6.30pm

Communications:

Tel – 0845 0179 578
Fax – 0845 0179 579
Email – office@simpsonfs.co.uk