Income Tax Planning

Married couples or those in civil partnerships with income in excess of £150 000 should look at whether it is possible to redistribute income to make the most of their tax allowances and rate bands.

Transfers of assets between husbands and wives or those in civil partnerships are free of capital gains tax so the lower earning spouse could have most, if not all, of the investment income in his or her own name and only pay tax at 20% or 40% rather than at 50% if the higher earning spouse has income in excess of £150,000. It is certainly worth the lower earning spouse having income of up to just under £100,000 in order to keep their personal allowance but only pay tax at a maximum of 40% rather than 50%.

For more advice on Income Tax Planning, please give us a call.

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