The Importance Of Tax Planning For Your Family |
Making the most of your allowances ... |
POSTED BY HELEN BEAUMONT ON 01/12/2017 @ 8:00AM
We all want to ensure our family are comfortable as we ourselves get older. Tax planning for your family is a vital role in this to ensure you make the most of your money for yourself, your spouse and your children ...
Tax planning for your family goes way beyond a piggy bank!
copyright: flynt / 123rf stock photo
There should be three main objectives in your plan. These are about making the most of your tax-free allowances and reliefs, keeping your marginal tax rates as low as possible and maintaining a spread between your income and your capital.
"There are many ways to create opportunities to save when tax planning for your family!"
One example would be to transfer assets to your spouse if they pay income tax at a lower rate as this could also cover amounts of capital gains tax on a future sale by using their tax free allowances.
As far as your children are concerned, you can make use of a Junior ISA so that family members can build a fund to help with university fees, helping them start their career debt free once they leave full-time education.
Children still have their own personal tax allowance and as long as income is less than £11,500 per year, there is no tax to pay providing the capital does not originate from their parents. If income arising from parental gifts is greater than £100 this will be taxed on the parent unless the child has reached the age of 18 or is married.
The £100 limit on income does not apply to income on gifts into a National Savings Children's Bonus Bond. The child pays tax on Income from capital gifted by grandparents or other close relatives, as income distributions from any trust funded by such capital.
One vitally important thing to consider is about making a Will. What would happen to your spouse or children if you didn't have one and you died tomorrow?
Beyond a Will, ensure you have adequate insurance cover, with life assurance written into trust for your spouse or children which allows quick access to funds. Despite repeated campaigns, it is believed that three-quarters of adults still do not have an up-to-date Will.
"Would you like to know more?"
If you'd like to learn more about tax planning for your family then do give me a call on 01908 774323 or click here to ping me an email and let's see how I can help you.
Until next time ...
HELEN BEAUMONT
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