Tax Planning & Wealth Management
tax planning can significantly improve your financial position
Identifying the right solution requires a detailed understanding of your individual circumstances, goals and ambitions. That is why at KAG our tax planning starts with a thorough review of your plans, risk apitite and aspirations.
There are a range of effective tax planing options that we can review and advise on including:
TAX PLANNING FOR BUSINESSES & COMPANIES
Profit & Cash Extraction
KAG offer a range of services designed to identify the most tax-efficient manner of extracting money from a business. There are a number of factors that inform strategy selection for each business including when dividends are paid and the level of contributions made to a company pension.
Maximising capital allowances can make a significant difference to your taxable profits. Capital allowances are available across a wide range of qualifying assets including plant & machinery, fixtures & fittings and office equipment. Allowances vary with some allowances offering an immediate reduction in taxable profits of 100% of the value of the asset purchased.
KAG can help you claim all available allowances and structure the purchase timings to optimise their impact.
Pension contributions offer tax efficiencies for employers, employees and directors. Company contributions to an employee’s pension get corporation tax relief and are free of income tax and national insurance contributions to personal schemes.
Business owners and company directors can take advantage of other flexible ways of contributing to their own retirement fund. We can help directors and small business owners identify the right pension strategies for them and their businesses for them and their company when picking a pension..
Family tax planning
There are options for structuring family-owned businesses in a commercially effective and tax-efficient way that optimises tax reliefs. Tax should also be carefully thought through when succession planning.
Financial Entity Selection
The choice of legal entity e.g. whether a business is structured as a limited company, partnership or registered as a sole trader can have an impact on overall tax liabilities. As a business evolves, the initial choice of legal entity should be kept under review. What suited a business when it was launched, may no longer be the most efficient structure as that business grows or contracts.
At KAG we advise on the most tax-efficient structure for any stage in a business life cycle.
Loss Relief – Offsetting Trading Losses
When a business suffers losses as a result of the business interests or investments, it is important to undertake a review to ensure available loss relief is being claimed in a tax-efficient manner. Losses can be carried back and used against earlier year’s profits, carried forward and used against future profits or used sideways and offset against total profits of the same period.
TAX PLANNING FOR INDIVIDUALS
Married couples should consider transferring income generating assets to their partner in order to fully utilise their respective tax-free allowances. This is also effective where one partner pays higher/additional rate tax and the other is non/basic rate taxpayer. They should also review ownership of income producing assets such as portfolios, rental property and shares.
Personal pension contributions can reduce the amount of income high taxpayers are due to pay.
Gift aid offers tax relief on unlimited amounts donated to qualifying charities at donor’s marginal relief of tax. For individuals looking to make charitable donations, it benefits both the donor and the charity, ensuring tax relief is maximised.
Individuals with an income in excess of £100,000 could look at personal pension contributions in order to preserve their allowance.
Capital Gains and Losses
Capital assets transferred between married couples are exempt from capital gains tax. Where tax will be payable on a potential gain, the primary taxpayer should think about transferring the assets to their partner. Transferring the asset into joint names can also ensure both spouses can claim their respective CGT annual allowance as and when an asset is disposed of.
UK tax residence
A new statutory UK tax residency test came into force 2013. For individuals with non-resident status, it is important to meet all the compliance conditions. Failure to do so can have potentially devastating and expensive consequences where an individual returning to the UK discovers their non-resident status is voided because they inadvertently exceeded their annual UK residency quota.
Threshold allowances vary with domiciled status, UK residency status in previous tax years and even the proportion of UK-based time spent working. It is imperative that the fine print of these rules is fully understood and detailed records kept.