Are taxes rising?
Now that the local council elections have concluded in many areas we can consider how the government will be able to fund the things it wishes to do.
Those earning higher salaries are likely to be taxed more than those on lower incomes. So, for example, if you earn over £50,000, not only will you pay a higher rate of tax at 40% you will also lose child benefit.
Another change involves the reduction of capital gains tax allowances. This is where you sell an asset for more than you bought it for. As a result, there is a greater chance of being taxed on the gain, which could manifest within an investment portfolio outside of an individual savings account (ISA).
Taking the income tax aspect first, if your earnings are marginally into the higher rate tax band, there may be things you can do, such as salary sacrifice or additional payments into pensions, that can reduce the impact of the tax. Please speak with an independent financial planner or your tax adviser. In the case of profit being made on an asset, for example, a second home or the sale of an antique you should take advice on how it is owned and, where possible, an investment portfolio might be in encashed over more than one tax year to make best use of the reducing allowances available.
In place of the taxable personal portfolio of equities or other investments, you should speak to your financial planner for alternatives that do not incur the same exposure to tax.
Taxation is hitting harder because allowances are generally frozen and, in some cases, reduced. The government is raising taxes to repay debts accumulated over the last 13 years. Typically this involves strategies that will hit many families hard now, although there may be potentially more generous allowances in the run-up to the next general election.
Tax is how the government repays debts on behalf of the nation. However, there are legitimate ways to reduce exposure to taxation. Discuss your concerns with an Independent financial planner to make the most of your money.
Eamonn Dorling Dip PFS
Senior Independent Financial Adviser
Brooks Wealth Management
Tel: 01733 314553 or 07767 795816
Email: Eamonn@brookswealth.co.uk
Brooks Wealth Management is a trading style of Ampris Limited is an appointed representative of Wealthline Limited, registered in England 08761632 (Registered office: 8a Cowgate, Peterborough) Wealthline Limited are authorised and regulated by the Financial Conduct Authority 684319