Get ahead of the game, as the general election looms

It’s been described as the longest general election campaign in history. Less than two months remain now before the country goes to the polls on 7th May. Although the outcome is anyone’s guess, one thing is for sure: changes may well be afoot with the new government.

So before the current tax year ends in April, here are a few issues you may want to consider:

A Capital Gain on an asset?

The annual Capital Gains Tax (CGT) exemption for 2014/15 is £11,000, which means gains made below this figure are CGT free. Currently, an 18 per cent rate of tax applies to gains made over this sum, to the extent they fall within the basic-rate band, and a 28 per cent rate applies to any remaining gains.

Tax Savings Tips for the Family

An old favourite, but still good advice:

• Equalise income between spouses to take advantage of personal reliefs and basic rate tax bands.
• Consider employing a spouse (where commercially justified) to redistribute income and consider transferring income-producing assets from relatives (e.g. grandparents) to make use of children’s tax allowances.

Inheritance Tax (IHT)

IHT of 40% is chargeable on estates of over £325,000. There are currently ways to mitigate the amount payable, but a new Government might take measures to lessen the effectiveness of any planning.

Mitigate a potentially large tax charge on your estate through tax-efficient gifting or investments that currently qualify for business or agricultural relief.

NISA Allowances – (New Individual Savings Accounts)

On 1st July 2014, ISAs were reformed into a simpler NISA product and the current Government allows fairly generous sums to be put into tax free NISA accounts (£15,000 from 1st July 2014 to 5th April 2015). Maximise your tax free savings in case changes are made in the future.

Charitable giving

Under current legislation, the donor of a gift-aid payment qualifies for higher- rate tax relief. It is also possible to make gifts of quoted shares or land and buildings to charity and claim income tax relief on the value of the gift.

If this is something you are considering, it’s important to take advice now on the potential savings available. As always, speak directly to your accountant and talk through the options.