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NewsletterPDF Jan 09.pub.pdf
Latest
interest rate cut pure PR 26 January 2009
Transact
Skandia
Fidelity
Bloomberg
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Things we can be sure of, Taxation and death....
Most of us risk being taxed on our
income, our capital gains and the value of our estate when we die. However, most
of us are also taxed on our income and capital gains in life too. Getting to
grips with how these taxes work and then discussing your situation with your
Accountant and Financial Adviser could be the most tax efficient discussion you
could have. This is just a guide. The tax bands are as follows for:
Tax year :
2008 / 2009
| Band |
Rate |
| £1 to £36,000 |
20% - Basic rate |
| Over £36,000 |
40% - Higher rate |
| Dividends - Basic rate taxpayer |
10% |
| Dividends - Higher rate taxpayer |
32.5% |
Income tax
Allowances
| Personal Basic |
£5,435 |
| Personal : 65 - 74 |
£9,030 |
| Personal 75 and over |
£9,180 |
| Age allowance income reduced by 50% on income
over |
£21,800 |
VCT
:
Up to £200,000 |
30% tax relief |
EIS:
Up to £200,000 |
20% tax relief |
Interest paid gross
f you are a Nil rate tax payer, all interest on your deposit
accounts, should be paid to you gross, providing you inform the provider by
completing a form R85.
Self Employed
The self employed are taxed through an Inland Revenue Self
Assessment Form. They declare the income earned or generated through the
business, less expenses incurred in the course of their trade. There are capital
allowances for expenditure on vehicles, plant & equipment, including
computers and tools used in the business. It is advisable to utilise the
services of a Chartered Accountant, who will guide you through this maze.
Capital Gains Tax (CGT)
For the tax year 2008 / 09 the CGT allowance for each person
is: £9,600
Individuals tax rate
:
18%
This means that you are not liable for any tax on capital gains under this
allowance. This applies to sales of shares and other investments including
investment properties.
Gains above the current allowance (£9,2600) are added to your
income for the tax year and taxed accordingly. If you are a higher rate tax
payer, then the tax will be 40% etc.
Inheritance Tax (IHT)
In the case of a married couple, this tax is calculated on
second death. It is nevertheless a voluntary tax in most cases, as a lot can be
done to mitigate this tax.
The current allowance is £312,000 per person (The Nil Rate
Band - NRB). Depending on the overall value of your estate (everything you own
anywhere in the world - is classified as your estate), your estate will be
liable to IHT @ 40% on the balance above the NIL rate band.
A well drafted
Wills are essential if you wish to mitigate Inheritance Tax.
For more information or a FREE review contact us
NOW: 01299 271471
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