Seven Investment Management (7IM) highlights five often overlooked ways that investors can make the most of tax efficient saving and investing in general.
Capital Gains Tax (CGT) and income tax allowance – the Cinderellas of tax planning?
“The capital gains tax and income tax allowances are the Cinderellas of tax planning.,” says 7IM relationship manager Michael Martin. “Where as Isa wrappers come with ‘ribbons and bows’ (a strong brand, in other words), there is no equivalent for capital gains and income tax allowances.
“This is probably why we find around 80% of new clients are not taking advantage of these important allowances. Crystallising gains annually in a tax efficient way can help mitigate a future tax bill, but it requires discipline and process, and it may be necessary to take advice.
“But if you are utilising your Isa allowance each year, why not be even more tax efficient and think about utilising your CGT and income tax allowance? This year’s 2017/18 capital gains tax allowance is £11,300 ($15,724, €12,748) and the income tax personal allowance is £11,500.”