The UK tax system can be very difficult to navigate, so working with an expert to make sure you’re not paying more tax than you need to can be very beneficial. After all, if you’re saving that amount in tax, you can use it to try and achieve your financial goals.
You could master individual aspects of the system but the trick can be understanding the combinations that apply to you and that’s where our financial planners really add value.
Your tax allowances
Our financial planners will ensure you are making the most of the most common allowances:
- ISA Allowance, including investment and cash ISA limits
- Income Tax
- Dividend Tax
- Capital Gains Tax (CGT)
Building up to retirement
Structuring your finances effectively in the build-up to retirement can make a difference to the quality of life you’re able to enjoy once you begin drawing your retirement funds. Our financial planners help clients to:
- Maximise pension contributions efficiently, including using Carry Forward
- Stay within the boundaries of the pension Annual Allowance (AA)
- Understand the impact of starting to draw pension funds early, which could result in Emergency Tax or triggering the Money Purchase Annual Allowance (MPAA)
Tax planning in retirement
Perhaps the most valuable recipients of tax planning are those in retirement, where they have little opportunity to earn the money again. Additionally, the UK tax system can make it a tightrope to walk with different allowances for different products.
Our financial planners help clients to:
- Visualise their retirement income plan through cashflow planning tools
- Draw funds tax-efficiently to meet income requirements
- Mitigate inheritance tax
Advanced tax planning
Venture Capital Trusts and the Enterprise Investment Scheme are two of the solutions that our financial planners can talk to more sophisticated investors about.
They are higher risk investments, but they can be suitable for clients who have already maximised more basic allowances.
Wren Sterling has financial planners who specialise in more complex investments, so please get in touch for an initial conversation.
Understanding the risks
A Wren Sterling financial planner will only recommend these types of investments if your circumstances and objectives merit them. It’s important to remember:
- Venture Capital Trusts (VCTs) are high risk investments and there may be no market for the shares should you wish to dispose of them. You may lose your capital.
- Enterprise Investment Schemes (EISs) and Seed Enterprise Investment Schemes (SEIS) are very high-risk investments. An EIS/SEIS investment is usually concentrated in one single unquoted trading company. Often there is no market for the shares and it may therefore be very difficult to make a disposal. There is a strong possibility of the chosen company failing.