Below we have listed and explained some opportunities that you might not be aware of to help when planning your year-end:
Pensions are still a tax-efficient way to save for your retirement. But be aware that if you go over your limit all the tax benefit disappears, and you have to pay tax on excess contributions at high rate. Pensions are a complicated area and advice is always recommended, speak to your advisor for the correct advice.
If you are open to more riskier (legitimate) options, then Venture Capital schemes may be attractive to you. These schemes known as Enterprise Investment Schemes, Seed Enterprise Investment Schemes and Venture Capital Trusts are designed to encourage investment in start-up businesses looking for external capital for growth.
All venture capital schemes offer attractive tax reliefs of 50% of the amount invested (for Seed EIS) up to fixed annual limits. Your gains are tax free if you hold the shares for a set period and then sell, if you lose money you get tax-loss relief. These schemes are continuously being refined to aim only at true capital risk, so whilst you may lose money on the investment, there is a significant tax cushion.
We are not qualified to give specific investment advice but can always point you in the right direction should you wish to explore these further.
Tax planning at the end of the year should not only focus on available tax reliefs, you should also use it to review how your finances and business is structured, it should also be a time for planning, what do you intend to do in the next 5 years, buy a business, sell a business, an asset, retire, or invest in someone. This gives you chance to take advantage of current tax schemes, plan for forthcoming changes and make sure your money works as tax efficiently as possible before it’s too late.
The above is for guidance only and does not constitute advice. Always, speak to a suitably qualified individual before undertaking any planning.