Over the last 35 years Income Tax has fallen from a breath-taking 98% (1978/79) to 45% and Capital Gains Tax has bounced from 30% up to 40% and down to 28%.
As a result, tax risk is a serious consideration in your retirement planning strategy especially when you need to retain as much of your net wealth as possible.
In managing tax risk, diversification across the various tax regimes is as important as diversification across the various investment sectors and asset classes.
With ISA Millionaires becoming more prevalent those who took full advantage of their annual allowances are laughing all the way to the bank. Likewise, those with investment strategies that take full advantage of the annual capital gains tax allowance are rubbing their hands with glee.
Tax exemption, Tax deferment and Tax relief are a starting point in all financial planning scenarios.
Transferring assets to your spouse/partner or assigning investments to beneficiaries can reduce, or defer, the ultimate tax point further; whilst sheltering your capital from inheritance tax (without giving it away) not only reduces your inheritance tax risk but allows your family to retain 100% of your tax-sheltered assets.
If you have ‘planned for life’ without ‘life-planning’ what gaps might you have in your tax risk?
At BROADSTONE we specialise in Life Planning – why not give us a call.
Helen Wilson
Consultant
Telephone: +44 (0)20 7893 3456
Email: getintouch [@] broadstoneltd.co.uk
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