Ipswich Financial Adviser

Posts Tagged ‘tax’

As a reminder to the post I made in November, the rules for taxing tax free cash from your pension change on the 6th April 2010. The pension companies are very busy with the additional requests and it will soon be too late to get everything organised by the 5th April 2010, so read on and make sure you don’t get caught out.

At present, if you reach your 50th birthday then you can potentially take up to 25% of your personal pension fund as a tax free lump sum. Unfortunately, from the 6th April 2010, the age to be able to do this changes to 55. There is NO transitional period, the change just comes in.

If you have always considered taking your tax free cash and you are not 55 on the 6th April 2010 then you will have to wait until you are. This could potentailly mean a wait of up to 5 years; as if you reach your 50th birthday just before the 6th April 2010 and don’t action a request for a tax free cash withdrawal then you will have to wait 5 years until your reach 55. This could affect your retirement plans.

If you feel this issue will affect you then you need to start planning now. Contact Thompson Financial Consulting Ltd and we will be happy to help.

The value of investments and the income from them can go down as well as up and an investor may not get back the amount invested. Past performance is not a guide to future performance.

Unlocking your pension will almost certainly mean that you will have less income in retirement AND because of the reduced level of income pension unlocking is usually only suitable for a very limited number of people and circumstances. All other options should be investigated fully before you consider unlocking your pension.

A simple form of tax planning is to ensure you have made a will.

Do make sure you get a professional to write the will for you as by “doing it yourself” you may actual cause more tax and issues within your estate once you pass away.

The will ensures your assets are passed to your beneficiaries and that you do not die intestate (without a will). If this happens then there are prescribed rules as to how your estate is divided up and this could cause unnecessary inheritance tax to be paid and the money to go to people you had no intention of receiving any money.

If you need a referral to a good will writer then please feel free to contact Thompson Financial Consulting and we will be happy to get you the advice that you need.

An easy way to preserve your money is to ensure you get your self assessment tax return done on time.

If you miss the deadline of the end of January 2010 to submit your return to the HRMC then you will incur a penalty.

Don’t let the HRMC have more of your money, so bite the bullet and get your tax return done before the cut off date.

The second thing to do is to check that your tax code is correct. Don’t assume that this has been correctly applied by an employer. If it is wrong you could be missing out on  tax free income. Check with your employer or HRMC to ensure you get what you are entitled to.

If you have any tax issues then please contact Thompson Financial Consulting and we can put you in touch with accountants that come highly recommended.

Inheritance tax is levied on your estate when you die. The first £325,000 (£650,000 for couples) is tax-free but if the value of your assets is more than that, tax will be levied at 40 per cent.

This may sound a large sum of money, but it includes all your assets, including property, cars, valuables, bank accounts and investments to name a few. With the increase in property values over time, more people get caught over the inheritance tax limits and end up paying 40% on the excess.

The best thing to do is to work out if your estate is worth more than the set limits. If your estate is worth more, then you need to get professional independent financial advice to find out ways of reducing the inheritance tax liability. On many occasions there are simple ways to do this and that can save the beneficiaries of your estate many thousands of pounds in unnecessary tax.

It is also best to look at inheritance tax planning as early as possible, because if you leave it to you are much older, you do not have as many opportunities to reduce this tax liability. My advice is to get advice early and start planning so that you can mitigate some or all of the potential tax overtime, making it easier for you to achieve you financial goals.

Please feel free to contact Thompson Financial Consulting and we will be happy to help with your inheritance tax advice needs.

If you are a non tax payer or have a partner that is a non tax payer then it is important that you do not pay tax unnecessarily.

An easy way that people get caught out is on their bank accounts. Any interest that is earned is automatically taxed at the basic tax rate (20%). A non tax payer then has to claim this back. Often this does not happen and the tax has been paid when it shouldn’t have been.

An easy way around this is register an HRMC form – R85. Your bank or building society will be happy to give you this form. Complete it and hand it back to the bank or building society and they will lodge this on your behalf. Importantly, the bank will then automatically pay your interest WITHOUT deducting tax. This means you don’t have to waste time re-claim tax that is rightfully yours.

If you require any help or advice with your savings or investments then please feel free to contact Thompson Financial Consulting we will be happy to help.

Inheritance tax is no longer an issue. True? Well – not really.

It’s true the rules changed for the better, in October 2007. But it’s also true that to benefit from these rules, it’s still vitally important to set up your will and your estate in the right way.

And if your estate is worth more than £325,000 (or £650,000 for a married couple/ civil partnership) you – or, more precisely, your heirs – will still have to pay inheritance tax.

So what do you do, there are lots of financial planning solutions to eliminate or reduce your inheritance tax liability, but one simple way is to gift money up to the allowable threshold which is £3000 per individual that gifts money. If you haven’t used this allowance in the previous tax year you can gift up to £6000. For a married couple that is £12,000. If you don’t need the money, it is an ideal way to reduce the size of your estate and pass the money to beneficiaries without attracting inheritance tax.

If you would like more advice with regards to inheritance tax planning then feel free to contact Thompson Financial Consulting, where we will be happy to help.

If you are fortunate enough to have savings or investments and these are not in a tax efficient vehicle like an ISA, it is likely you will have to pay tax on the interest you receive at your prevailing income tax level. This could be nil, 20% or 40% of the interest you receive.

But what if your spouse has a lower income tax level than you? The sensible thing to do would be to put some or all the money into your spouses name so that any interest received would be taxed at your spouse’s lower income tax rate. Simple but very effective!

Always check with your tax adviser and financial adviser before making any changes to your savings or investments to ensure you don’t trigger any other taxes, but on most occasions you can prevent paying unnecessary tax to the HRMC.

If you would like any help or advice on this matter please contact Thompson Financial Consulting Ltd

The value of investments and the income from them can go down as well as up and an investor may not get back the amount invested. Past performance is not a guide to future performance.

If you are over 50 years old in the 2009 /2010 tax year then you can take advantage of the increased ISA allowances from the 6th October this year. All other ISA investors will have to wait until 6th April 2010 for the increased limits.

The ISA limit will be raised to £10,200, of which £5,100 can be held in cash.

This is a wonderful opportunity to be able to invest your money in a tax efficient investment. Don’t miss out and even if you don’t have the full allowance it is still worth while utilising your ISA allowances.

If you require any help or advice please go to Thompson Financial Consulting Ltd

The value of investments and the income from them can go down as well as up and an investor may not get back the amount invested. Past performance is not a guide to future performance.