3DfinancialplanningPWP WK Mar15 blue
53a High Street Reigate Surrey RH2 9AE
01737 225989 [email protected]
Year-end tax planning tips The end of the tax year is approaching. As we head into the inal month of the 2014/15 inancial calendar, we take a look at personal tax reliefs and allowances to use.
Income tax The personal allowance is £10,000 for 2014/15 and will rise to £10,600 in 2015/16. If you pay tax at the higher rate (40%) or additional rate (45%), you have a number of options to reduce your taxable income. Have you thought about deferring your income, transferring assets to your spouse or increasing your pension contributions? Are there any tax-eicient salary sacriice arrangements ofered by your employer?
Capital gains tax You are allowed to make up to £11,000 in capital gains before you begin to be taxed at 18%. If you have made more than £11,000 in capital gains, you can ofset this with any capital losses incurred during the same period.
Inheritance tax You will be charged 40% inheritance tax (IHT) for all assets
exceeding the £325,000 nil rate band. You are allowed to give away up to £3,000 in IHT-exempt gifts during each tax year. More general IHT planning pointers to consider include transferring part of your estate into diferent, IHT-eicient assets or placing assets into a trust.
Pension contributions You can contribute up to £40,000 into your pension each year and beneit from tax relief at your marginal rate. Basic rate tax relief is deducted automatically and higher or additional rate taxpayers must claim additional relief in their tax returns. If you’ve used up your 2014/15 annual allowance, you may be able to use any unused allowances from the last 3 tax years.
Tax-eicient investments The annual investment limit for ISAs is currently £15,000. Enterprise investment schemes allow you to claim 30% income tax relief on up £1 million invested in new shares. Tax reliefs are also available through investments in venture capital trusts and seed enterprise investment schemes. Enterprise investment schemes and venture capital trusts can be complex and high risk, so advice is essential. Talk to an adviser about minimising your tax liability.
3D Financial Planning is appointed representative of the Best Practice IFA Group Limited which is authorised and regulated by the Financial Conduct Authority
www.3dfinancialplanning.co.uk
We look at tax reliefs and allowances to use before the end of the 2014/15 tax year. April 2015 will see the introduction of the government’s lagship pension reforms but one ifth of retirement savers are still unsure about how to access their pensions. And, 1 in 5 employers left their auto-enrolment preparations until the last minute in 2014: how will small and micro businesses fare over the next 3 years?
MARCH 2015
In this month’s Wealth Knowledge newsletter…
Savers undecided about retirement strategy A ifth of British people don’t know what they will do with their retirement savings following the introduction of the government’s pension reforms, research by the National Employment Savings Trust (NEST) has found. From April 2015, retirees will be granted more freedom in how they access their deined contribution pension pots. Savers will be able to withdraw multiple lump sums, efectively removing the requirement to buy an annuity. Advice should be taken to understand the potential tax consequences and reduction in the annual allowance for anyone taking more than 25% of their pension in this way. NEST’s research has found that 22% of savers are unsure about how they will take their pension. The study asked 2,000 people about their retirement plans: • 16% will buy an annuity • 19% will keep it invested and take an income from it • 19% will drawdown some of their pension and invest the rest in a way that provides an income • 13% will withdraw some in cash and convert the rest into an annuity • 7% will take all of it in cash.
Retirement options If you are approaching retirement without a inancial plan, now is a good time to start thinking about how you will use your savings.
Cash From April 2015, people aged 55 and over will have a greater range of options when it comes to taking their pensions as cash. After withdrawing the irst 25% tax-free, retirees will now be able to withdraw multiple lump sums with any such payments subject to their marginal rate of tax. Consider the tax implications of lump-sum withdrawals and that you will not have a guaranteed income for the rest of your life.
Annuity If you use your pension pot to buy an annuity from an insurance company, you only have to make one transaction that will provide you with a retirement income. An annuity is not a requirement for retirees, but ofers the beneit of providing certainty for the future, although this comes at the price of less lexibility than pension drawdown.
Income drawdown
Important Information
Income drawdown allows you to use your pension as a source of regular income while leaving what’s left invested. This is useful if you want to avoid or delay converting your pension pot into an annuity.
The value of investments can fall as well as rise and you may not get back the amount you originally invested. ISA and pension eligibility depends on personal circumstances. Tax rules and allowances are not guaranteed and may change in the future. You cannot normally access pension beneits until age 55. Certain investments, such as EIS and VCT schemes, can be high risk and are not suitable for most investors. Specialist advice is essential to establish both eligibility and suitability for such schemes. Whilst EIS and VCT schemes may have
You can start capped or lexible income drawdown (with capped drawdown ceasing to be available for new arrangements from the 6th April 2015) but both are taxed in the same way. Pension drawdown is higher risk than taking a traditional annuity, and investment risk means that income may not be sustainable at a particular level or may stop altogether. Contact us to discuss your retirement income options.
1 in 5 employers late with auto-enrolment Almost 1 in 5 employers that passed their auto-enrolment staging date in 2014 either missed the compliance deadline or left preparations to the last minute, according to research by NOW: Pensions. Of the 4,279 businesses that used NOW: Pensions to auto-enrol their employees last year: • 17% either sent their application late or did it close to the deadline • of these, 8% handed in their application late. The Pensions Regulator recommends that employers register more than 6 months before their staging date. Morten Nilsson, chief executive of NOW: Pensions, said: “While employers are being encouraged to get their autoenrolment plans in place early, the reality is a large proportion are leaving it late or missing the deadline altogether. “We strongly recommend that employers follow the regulator’s advice and make their provider selection as early as possible to avoid unnecessary stress.”
Preparing for your staging date Small and micro employers will begin to comply with autoenrolment duties from April 2015. Around 45,000 small and micro companies will pass their staging dates between April and December 2015 and more than 1 million will stage during 2016 and 2017. A recent survey of small irms by the National Employment Savings Trust revealed that: • 83% of small and micro employers have not set up a workplace pension scheme • 91% of small employers and 85% of micro employers are aware of the changes • 18% say they understand what the changes mean for their business in practical terms.
We can help you prepare for auto-enrolment.
signiicant tax beneits, the value of investments can fall as well as rise and you may not get back all, or even any, of the amount you originally invested. This document is solely for information purposes and nothing in this document is intended to constitute advice or a recommendation. Whilst considerable care has been taken to ensure that the information contained within this document is accurate and up-to-date, no warranty is given as to the accuracy or completeness of any information. E & OE.
01737 225989 [email protected]
Year-end tax planning tips The end of the tax year is approaching. As we head into the inal month of the 2014/15 inancial calendar, we take a look at personal tax reliefs and allowances to use.
Income tax The personal allowance is £10,000 for 2014/15 and will rise to £10,600 in 2015/16. If you pay tax at the higher rate (40%) or additional rate (45%), you have a number of options to reduce your taxable income. Have you thought about deferring your income, transferring assets to your spouse or increasing your pension contributions? Are there any tax-eicient salary sacriice arrangements ofered by your employer?
Capital gains tax You are allowed to make up to £11,000 in capital gains before you begin to be taxed at 18%. If you have made more than £11,000 in capital gains, you can ofset this with any capital losses incurred during the same period.
Inheritance tax You will be charged 40% inheritance tax (IHT) for all assets
exceeding the £325,000 nil rate band. You are allowed to give away up to £3,000 in IHT-exempt gifts during each tax year. More general IHT planning pointers to consider include transferring part of your estate into diferent, IHT-eicient assets or placing assets into a trust.
Pension contributions You can contribute up to £40,000 into your pension each year and beneit from tax relief at your marginal rate. Basic rate tax relief is deducted automatically and higher or additional rate taxpayers must claim additional relief in their tax returns. If you’ve used up your 2014/15 annual allowance, you may be able to use any unused allowances from the last 3 tax years.
Tax-eicient investments The annual investment limit for ISAs is currently £15,000. Enterprise investment schemes allow you to claim 30% income tax relief on up £1 million invested in new shares. Tax reliefs are also available through investments in venture capital trusts and seed enterprise investment schemes. Enterprise investment schemes and venture capital trusts can be complex and high risk, so advice is essential. Talk to an adviser about minimising your tax liability.
3D Financial Planning is appointed representative of the Best Practice IFA Group Limited which is authorised and regulated by the Financial Conduct Authority
www.3dfinancialplanning.co.uk
We look at tax reliefs and allowances to use before the end of the 2014/15 tax year. April 2015 will see the introduction of the government’s lagship pension reforms but one ifth of retirement savers are still unsure about how to access their pensions. And, 1 in 5 employers left their auto-enrolment preparations until the last minute in 2014: how will small and micro businesses fare over the next 3 years?
MARCH 2015
In this month’s Wealth Knowledge newsletter…
Savers undecided about retirement strategy A ifth of British people don’t know what they will do with their retirement savings following the introduction of the government’s pension reforms, research by the National Employment Savings Trust (NEST) has found. From April 2015, retirees will be granted more freedom in how they access their deined contribution pension pots. Savers will be able to withdraw multiple lump sums, efectively removing the requirement to buy an annuity. Advice should be taken to understand the potential tax consequences and reduction in the annual allowance for anyone taking more than 25% of their pension in this way. NEST’s research has found that 22% of savers are unsure about how they will take their pension. The study asked 2,000 people about their retirement plans: • 16% will buy an annuity • 19% will keep it invested and take an income from it • 19% will drawdown some of their pension and invest the rest in a way that provides an income • 13% will withdraw some in cash and convert the rest into an annuity • 7% will take all of it in cash.
Retirement options If you are approaching retirement without a inancial plan, now is a good time to start thinking about how you will use your savings.
Cash From April 2015, people aged 55 and over will have a greater range of options when it comes to taking their pensions as cash. After withdrawing the irst 25% tax-free, retirees will now be able to withdraw multiple lump sums with any such payments subject to their marginal rate of tax. Consider the tax implications of lump-sum withdrawals and that you will not have a guaranteed income for the rest of your life.
Annuity If you use your pension pot to buy an annuity from an insurance company, you only have to make one transaction that will provide you with a retirement income. An annuity is not a requirement for retirees, but ofers the beneit of providing certainty for the future, although this comes at the price of less lexibility than pension drawdown.
Income drawdown
Important Information
Income drawdown allows you to use your pension as a source of regular income while leaving what’s left invested. This is useful if you want to avoid or delay converting your pension pot into an annuity.
The value of investments can fall as well as rise and you may not get back the amount you originally invested. ISA and pension eligibility depends on personal circumstances. Tax rules and allowances are not guaranteed and may change in the future. You cannot normally access pension beneits until age 55. Certain investments, such as EIS and VCT schemes, can be high risk and are not suitable for most investors. Specialist advice is essential to establish both eligibility and suitability for such schemes. Whilst EIS and VCT schemes may have
You can start capped or lexible income drawdown (with capped drawdown ceasing to be available for new arrangements from the 6th April 2015) but both are taxed in the same way. Pension drawdown is higher risk than taking a traditional annuity, and investment risk means that income may not be sustainable at a particular level or may stop altogether. Contact us to discuss your retirement income options.
1 in 5 employers late with auto-enrolment Almost 1 in 5 employers that passed their auto-enrolment staging date in 2014 either missed the compliance deadline or left preparations to the last minute, according to research by NOW: Pensions. Of the 4,279 businesses that used NOW: Pensions to auto-enrol their employees last year: • 17% either sent their application late or did it close to the deadline • of these, 8% handed in their application late. The Pensions Regulator recommends that employers register more than 6 months before their staging date. Morten Nilsson, chief executive of NOW: Pensions, said: “While employers are being encouraged to get their autoenrolment plans in place early, the reality is a large proportion are leaving it late or missing the deadline altogether. “We strongly recommend that employers follow the regulator’s advice and make their provider selection as early as possible to avoid unnecessary stress.”
Preparing for your staging date Small and micro employers will begin to comply with autoenrolment duties from April 2015. Around 45,000 small and micro companies will pass their staging dates between April and December 2015 and more than 1 million will stage during 2016 and 2017. A recent survey of small irms by the National Employment Savings Trust revealed that: • 83% of small and micro employers have not set up a workplace pension scheme • 91% of small employers and 85% of micro employers are aware of the changes • 18% say they understand what the changes mean for their business in practical terms.
We can help you prepare for auto-enrolment.
signiicant tax beneits, the value of investments can fall as well as rise and you may not get back all, or even any, of the amount you originally invested. This document is solely for information purposes and nothing in this document is intended to constitute advice or a recommendation. Whilst considerable care has been taken to ensure that the information contained within this document is accurate and up-to-date, no warranty is given as to the accuracy or completeness of any information. E & OE.
