Utilising allowances

Utilising allowances

With periodic changes to tax rates and allowances for individuals, it is important to review asset ownership and the resulting income and capital split between couples, to help minimise your overall tax liability.

Couples should review the ownership of income producing assets, such as portfolio investments, rental property, bank accounts or private company shares and seek advice on how ownership can be varied so that income can be shared to best post tax effect. An individual with taxable income in excess of £100,000 will have his/her personal allowance tapered away.

A review of asset ownership between couples on a timely basis can also help reduce capital gains tax (CGT) liabilities. Planning involving the effective utilisation of the annual CGT exemption, together with other available reliefs, can be considered to mitigate a future liability. Do also consider whether one party to the couple has any capital losses from earlier years which could further increase the tax saving.

If you would like more information download our sweeter tax planning ideas or contact Joan Foster.