Top 10 tax saving tips

4th December 2013

Here are our top 10 ways of saving tax – for you, your family and your business.

1. Maximise personal allowances

Ensure that you are making the most of your tax-free personal allowances, which for 2013/2014 is £9,440 for those aged under 65, or the higher age-related allowance which is up to £10,660, maximum income £28,540.

2. Pay into a pension scheme

Investing in a company or personal pension scheme will afford tax breaks on your personal pension contributions. For additional rate taxpayers, maximising pension contributions (within limits)  during 2013/2014 will allow you to claim tax relief of 45%.

3. Use your Capital Gains

Tax (CGT) Exemption Make the most of your CGT exemption limit each year (£10,600 in 2013/2014). It may be possible to transfer assets to a spouse or civil partner or hold them in joint names prior to any sale to make full use of exemptions.

4. Invest in an ISA

Up to £11,520 can be invested in an ISA this tax year, of which up to £5,760 can be invested in cash.

5. Review your business structure

The structure of your business can have a significant impact on the amount of tax you pay. When you started in business, you may have been a sole trader, or in a partnership, but as profits rise it may  be more beneficial to form a limited company.

6. Go for green transport

Switching to a ‘green’ car with lower CO2 emissions can reduce your tax liability.

7. Review capital expenditure

Review your capital expenditure to maximise claims for capital allowances. The majority of  businesses can claim a 100% Annual Investment Allowance on the first £250,000 of expenditure on most  types of plant and machinery (except cars). Here are our top 10 ways of saving tax – for you, your family and your business.

8. Rent out a room

Under the ‘rent a room’ scheme, income from letting furnished rooms in your main residence is exempt if the gross annual rent does not exceed £4,250 (£2,125 if you share the income).

9. Write a Will and keep it up to date

A well-drafted Will can ensure that the wealth you have built up during your lifetime benefits the right people on your death – and it can also be structured to save tax.

10. Utilise inheritance tax (IHT) exemptions

You should make the best use of IHT allowances, including the annual exemption, which allows you to give away cash or assets up to a total value of £3,000 a year without incurring  any taxes.

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