Proper financial planning is essential if you want to achieve your lifetime goals, and in today’s challenging economic climate it’s more important than ever.
Our Dyke Yaxley Tax Planning Consultant, Pam Mason, says there are several key areas to consider.
“Whatever your long-term goals, your key personal planning objectives should include making the most of tax-free opportunities, keeping tax rates as low as possible across the family, and keeping a balance between income and capital.
“Every member of your family is taxed as an individual, and so they are all entitled to their own allowances and exemptions.”
Pam said employing family members in your business could also prove a tax-efficient option, as long as the package could be justified commercially.
“As well as a salary, tax-efficient remuneration packages can also include benefits such as a company car or medical insurance, and payments into a pension scheme.
“Taking family members into partnership can give you more flexibility when it comes to allocating profits, and it can also be a tax-efficient way of passing on the family business in the longer term.”
Pam also suggested several types of investments could produce tax-free income including some National Savings products and Individual Savings Accounts (ISAs). Other alternatives include the Enterprise Investment Scheme, and Venture Capital Trusts.
“Statistics show that many people are heading towards retirement without enough pension savings to support even the most basic standard of living. It may seem like a long way off, but it’s vital to start planning as soon as possible to make sure you can retire comfortably.
“And it’s also vital you have a well-drafted will in place to ensure the wealth you’ve built up during your lifetime will be distributed tax-efficiently and according to your wishes.
“You may also want to consider making gifts from your taxable estate into trust, or maximising the tax relief on charitable donations. By structuring your financial planning, you can significantly reduce the tax due when you die, and maximise the benefits during your lifetime.”
Dyke Yaxley’s Pam Mason