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Kwasi Yeboah tells us all we need to know about tax planning.
What is tax planning?
Tax planning tends to focus on making people more tax efficient, to reduce an individual’s tax liabilities by making use of rebates, exemptions and other benefits as appropriate.
The idea is to minimise the individual’s assets and income exposure to taxation. Almost all aspects of financial planning are underpinned by ensuring that individuals are tax efficient. So it is an integral part of our work as financial advisors.
Why is tax planning important?
This will enable your money to go further. Some of the main reasons for looking at planning tax might be to get greater control over tax payments or the timing of those payments; a reduction in your exposure to certain tax rates, or to reduce your tax bills overall. Taking full advantage of tax credits is helpful, plus it also helps to be aware of tax legislation, which is always changing almost on an annual basis.
For most of us, there will not be too many opportunities to make use of tax planning. The vast majority of people have one source of income: their employment. If you are employed, tax is deducted at source – before you receive your pay.
But that should not prevent you from saving and investing tax efficiently, and making use of your allowances.
How can I make the most of tax allowances?
The starting point is to find out which allowances are available to you. Then, it is really a matter of working out whether your income and assets could be structured more tax efficiently by making use of these allowances. So after you have done that bit of homework, unless you are comfortable doing it yourself, you should seek professional help.
A financial advisor should be able to provide comprehensive planning of tax advice for a wide range of clients and needs.
How can First Thought Financial Services help?
We have access to a whole suite of tax planning tools. And all our financial planning advice is underpinned by Quilter Financial Planning, a FTSE250 firm. With tax planning, it is important that you seek advice if you are uncertain about anything, and we are more than happy to help.
Tax treatment varies according to individual circumstances and is subject to change.