Here are a few simple tips to help with your tax planning:
If you haven’t already, pay yourself dividends to use up the dividend allowance. Companies with adequate retained profits should contemplate paying dividends to shareholders who have not yet used up their dividend allowance for 2018/2019. The dividend allowance is up to £2,000 and is available to all individuals irrespective of the rate at which they pay tax.
Have you considered making any pension contributions? Tax relieved pension contributions can all total to 100% of earnings, capped at the level of the annual allowance. The annual allowance is up to £40,000 for 2018/19 (subject to the cutback for high earners.) if all the annual allowance hasn’t been used up within the year, it can be carried forward for up to three years.
You can also make contributions of up to £2,880 a year in to a stakeholder pension for anyone even if they have no earnings.
Are you eligible to claim marriage allowance? If you earn less than your partner and less than £11,850 this allowance lets you transfer £1,190 of your personal allowance to your husband, wife, civil partner. This can save a couple up to £238 in 2018/19, but your partner must not have paid tax at the higher or additional rate. However, the marriage allowance must be claimed.
How about gifting some assets to family for inheritance tax purposes? All individuals have an annual exemption for inheritance tax up to the £3,000 threshold, enabling them to make gifts free of any clawback for inheritance tax every year. If the allowance isn’t used, it can be carried forward to the next year, but is then lost.
If you would like further information on the above or need help with other tax related matters, please contact us with the following details.