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Married couples - Transfer shares and save tax
Arrange shareholdings within your portfolios to save tax when you
can each take advantage of your annual tax free CGT allowance. Any
transfers between husband and wife are tax free.
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Don't forget your children - £7,700 p.a.
of tax free gains
Each child is allowed to make £7,700 of tax free gains in their
own name. It may be possible for parents to purchase investments with
capital growth for the benefit of their children, and save significant
capital gains tax when investments are sold.
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Stakeholder pensions - Help from the taxman
To pay into a standard pension you need qualifying earnings, i.e.
a salary, when it may be possible to pay dividends and save up to
21.8% NIC contributions. With a stakeholder pension you do not need
qualifying earnings and you can still pay £2,808 into a stakeholder
pension, and the tax man will put in a further £792.
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Stakeholder pensions - Pensions for children
At present it is not necessary to have qualifying earnings or be in
employment to take out a stakeholder pension (see above) Therefore
if you make contributions for your new born baby from now till maturity,
you receive basic rate tax relief and they, may never need to contribute
a penny into their own pension and retire in style.
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Pensioners - Receive your interest gross
If you are a pensioner or on low income then you can elect to receive
your Bank and Building society interest with no tax deducted. This
saves complicated form filling at the year end to reclaim this tax.
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Bed and Spouse
Selling and buying back the same shares to use your capital gains
allowance (bed and breakfast) is no longer available. Therefore sell
the shares and let your spouse buy them back (bed and spouse). This
allows you to realise your gain without paying capital gains tax and
still keep the shares in the family.
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Use your capital gains allowance
Sell shares or any assets that are subject to capital gains tax and
if the total gains are less than £7,700 (for 2002/2003) then
no tax is due. Husband and wife have an annual allowance of £7,700
each. If one spouse is likely to exceed the limit, simply transfer
some assets into the others name before sale to use their allowance.
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Revalue assets at 31 March 1982
If you acquired or were given an asset prior to 31 March 1982 you
can claim tax relief for the increase in value up to this date.
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Buy premium bonds
Any money you win is tax free.
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Invest in ISA's
Once invested the income and capital gains are tax free.
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