TAX PLANNING BEYOND THE BUILDING BLOCKS OF ISAS AND SIPPS
ALTHOUGH INDIVIDUAL CIRCUMSTANCES WILL DIFFER AND WE WOULD ALWAYS RECOMMEND A PERSONALISED APPROACH, BELOW YOU WILL FIND SOME TAX EFFICIENT SOLUTIONS THAT COULD BE CONSIDERED.
The Basics
ISA | With a Stocks & Shares ISA, you can invest up to £20,000 a year tax-free |
LISA | Invest up to £4,000 a year and benefit from a government bonus of up to 25%* |
SIPP | Annual contributions of up to £40,000 for most UK residents and added tax relief from the government* |
Trusts | We can advise on all matters associated with both the creation and the ongoing management of all trusts |
Tax allowances | From income tax and savings allowances to personal allowances and exemptions, we consider all allowances relevant to you |
Annual tax return | Our Personal Tax Service can organise the preparation, completion and submission of annual tax returns on your behalf |
For the Family
JISA | An allowance of up to £9,000 but all the tax-free benefits of a standard ISA |
Junior SIPP | Invest £2,880 and get tax relief from the government to make this up to £3,600 |
Child Trust Fund | Continue to invest up to £4,128 a year until your child is 18 |
Other Considerations
Estate Planning | Simply put, Estate Planning aims to ensure that as much of your wealth goes to your loved ones, and not the tax man |
Tax-free gifting | From the £3,000 annual exemption to large potentially exempt transfers, giving away assets isn’t as simple as you might expect |
Capital Gains Tax | How much do you need to pay and are you missing out on any potential reliefs? |
VCTs | Invest up to £200,000 a year and claim up to 30% tax relief |
EIS | Invest up to £1m a year and claim up to 30% tax relief |
Which is better – a Lifetime ISA, an ISA or a SIPP?
Product | Lifetime ISA | Investment ISA | Personal pension |
|---|---|---|---|
Minimum age | 18 | 18 (adult ISA) | 18 (adult ISA) |
Maximum age | 40 to open, 50 to contribute | No | 75 (for tax relief |
Basic rate tax relief on contributions @20% | No | No | Yes |
Higher rate tax relief on contributions | No | No | Yes |
Tax free growth within the wrapper | Yes | Yes | Yes |
Government bonus on contributions @20% | Yes, capped at £1,000 per year, £32,000 total | No | No |
Tax-free withdrawals | Yes | Yes | First 25% only |
Penalty-free withdrawals | Subject to conditions | Anytime | From 55 (57 from 2028) |
Penalty rate | 25% of total fund | n/a | 55% (if over the lifetime allowance) |
Recommended Killik Explains video:
SEVEN RULES FOR TAX EFFECTIVE INVESTING
