SPRING BUDGET – TAX TIPS AND YEAR END PLANNING
In this Bulletin we look at the impact of the main changes on different groups of taxpayers. Inevitably the categorisation is somewhat arbitrary, so it pays to read all sections. Similarly, some tax planning points – such as those listed below in our 12 Quick Tax Tips – are universal.
12 QUICK NEW YEAR TAX TIPS
- Don’t waste your (or your partner’s) £10,600 personal allowance.
- Don’t dismiss the starting rate band – it is 0% and £5,000 wide in 2015/16.
- Don’t ignore National Insurance contributions –they are really a tax at up to 25.8%.
- Think marginal tax rates – the system now creates 60% (and higher) marginal rates.
- With an election on 7 May, tax planning should not stop on 5 April.
- The new marriage allowance starts in 2015/16: it might save you £212.
- ISAs should normally be your first port of call for investments and then deposits.
- Capital gains are usually taxed more lightly and less quickly than income.
- Trusts can save inheritance tax, but suffer the highest rates of CGT and income tax.
- File your tax return on time to avoid penalties and the taxman’s attention.
- Never let the tax tail wag the investment dog.
- Don’t assume that HMRC won’t find out, as the news has recently demonstrated …
George Osborne’s sixth Budget was inevitably a heavily political set piece, given that the general election was just fifty days away. Some measures – such as a £1m investment to celebrate the 600th anniversary of Agincourt and an unexpected review of deeds of variation – seemed included only to give the Chancellor an opportunity to make a joke at Ed Miliband’s expense. Carefully scripted humour aside, there was some real content to the Budget. However, many of the proposals came with an unspoken condition that the necessary legislation is dependent upon the outcome of that impending election.
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