Skip to main content

Five ways to cut your tax bill

 

Tax is an inevitable and a fact of life. But while it's good to pay your way, there are ways to make sure you don't pay more tax than you need to and cut your tax bill. Here's how.

1. Save into an Isa

Tax breaks are few are far between, so saving into an Isa makes sense. You can put up to £10,200 into an Isa this year. Up to £5,100 can be cash Isa and earn tax-free interest.

The remainder can be put in an investment Isa wrapper, which can then be invested in funds and which will then be free from capital gains tax. Dividends on shares and funds are taxed at 10% in an Isa, as they are outside an Isa, but higher rate taxpayers are protected from the 32.5% higher rate of dividend tax.

- How to make the most of your Isa

2. Save into a pension

For basic rate taxpayers, pensions earn 20% tax relief. If you have a work pension then this means your contributions will come from your pre-tax income. If you save into a personal pension your contributions will be boosted by the 20% tax relief, effectively increasing £800 that you put in to £1,000.

Higher rate taxpayers paying into an occupational scheme will typically find that their employer gives them the 40% relief in the same way that basic rate taxpayers do. Those paying into a personal pension need to claim the relief through their tax return.

- How to make the most of pensions savings

3. Inheritance tax

Individuals have a £325,000 inheritance tax allowance, married couples and civil partners can pass this between them to double it to £650,000. You can give away up to £3,000 in total per tax year to as many people as you wish without it affecting your estate. A couple can give away £6,000.

- How to deal with inheritance tax

4. Capital Gains Tax

Everyone has a CGT allowance of £10,100 a year. If you have made money on investments, you can deduct your personal CGT allowance from the gain before paying tax at 18% on the rest. The allowance can effectively be doubled for married couples and civil partners by passing assets between them. If you've made a loss you can set it against future gains by registering it on your tax return.

Buy-to-let landlords or holiday homeowners cannot drip sell assets to avoid CGT in the way that shares investors can, however, there are reliefs available, especially if you make your second home or rental property your main home – which is free from CGT.

- Capital Gains Tax: what to do

- How to cut tax on buy-to-let

5. Income tax: Check your tax code

Tax codes have come under the microscope recently. Blunders by the tax office have seen them sent out wrongly, but despite this everyone should check their taxcode to make sure they aren't paying too much.

- How to decode your tax code

Popular posts from this blog

Study Abroad USA, College of Charleston, Popular Courses, Alumni

Thinking for Study Abroad USA. School of Charleston, the wonderful grounds is situated in the actual middle of a verifiable city - Charleston. Get snatched up by the wonderful and customary engineering, beautiful pathways, or look at the advanced steel and glass building which houses the School of Business. The grounds additionally gives students simple admittance to a few major tech organizations like Amazon's CreateSpace, Google, TwitPic, and so on. The school offers students nearby as well as off-grounds convenience going from completely outfitted home lobbies to memorable homes. It is prepared to offer different types of assistance and facilities like clubs, associations, sporting exercises, support administrations, etc. To put it plainly, the school grounds is rising with energy and there will never be a dull second for students at the College of Charleston. Concentrate on Abroad USA is improving and remunerating for your future. The energetic grounds likewise houses various

Best MBA Online Colleges in the USA

“Opportunities never open, instead we create them for us”. Beginning with this amazing saying, let’s unbox today’s knowledge. Love Business and marketing? Want to make a high-paid career in business administration? Well, if yes, then mate, we have got you something amazing to do!   We all imagine an effortless future with a cozy house and a laptop. Well, well! You can make this happen. Today, with this guide, we will be exploring some of the top-notch online MBA universities and institutes in the USA. Let’s get started! Why learn Online MBA from the USA? Access to More Options This online era has given a second chance to children who want to reflect on their careers while managing their hectic schedules. In this, the internet has played a very crucial in rejuvenating schools, institutes, and colleges to give the best education to students across the globe. Graduating with Less Debt Regular classes from high reputed institutes often charge heavy tuition fees. However onl

Sickening moment maskless 'Karen' COUGHS in the face of grocery store customer, then claims she doesn't have to wear a mask because she 'isn't sick'

A woman was captured on camera following a customer through a supermarket as she coughs on her after claiming she does not need a mask because she is not sick.  Video of the incident, which has garnered hundreds of thousands of views on Twitter alone, allegedly took place in a Su per Saver in Lincoln, Nebraska according to Twitter user @davenewworld_2. In it, an unidentified woman was captured dramatically coughing as she smiles saying 'Excuse me! I'm coming through' in the direction of the customer recording her. Scroll down for video An unidentified woman was captured dramatically coughing as she smiles saying 'Excuse me! I'm coming through' in the direction of a woman recording her A woman was captured on camera following a customer as she coughs on her in a supermarket without a mask on claiming she does not need one because she is not sick @chaiteabugz #karen #covid #karens #karensgonewild #karensalert #masks we were just wearing a mask at the store. ¿ o