Here are 4 ways that you can shield your assets from the taxman.
1. ISAs – Are tax shelters. You can place £20,000 each tax year.
For those aged 18-39 there is a Lifetime ISA (LISA). You get a 25% bonus up to £1,000 a year on annual limit of £4,000, which is part of your £20,000 allowance.
2. PENSIONS – You automatically get relief to contributions at the basic 20% rate, so if you invest £8,000 in your pension you will get an extra £2,000 from the government. Higher and top rate tax payers can claim their additional 20% or 25% through their self assessment tax return.
3. DIVIDENDS – The current allowance is £2,000 but couples can share investments to boost this to £4,000.
4. EXTRA INCOME – Rent from an investment property, income from bonds and interest from savings are all subject to tax. Tax rules currently allow you to earn £12,500 before income tax (for 2021 – 2022 tax year this has been raised to £12,570) and a personal savings allowance of £1,000 for basic tax payers and £500 for higher payers, If you’re married you can share your savings and investments to maximise your allowance.
Call us for for more help on how to best protect your assets.