Approaching year end ‘top tax tips’

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Reminder to tell the tax man

As the 31 January deadline for submitting your tax self-assessment draws near, remember to ‘tell the tax man’ about your charitable donations. There are tax reliefs available for additional and higher rate tax payers. Do contact us if you’d like us to check our records for you, to quantify all donations through us this year.

Giving options

Did you know that there can be significant tax advantages to giving assets to charity? We can accept many types of assets, from recognised investment funds, shares and securities, shares in an OEIC, interests in offshore funds, to UK property.

The benefits to you are:

  1. you can reduce your total income tax liability, so a top-rate income tax payer will secure 45% tax relief on the value passed to the charity, and
  2. gifts to charity are not subject to capital gains tax so, where you have assets standing at a large unrealised capital gain, this relief can be particularly attractive.

Let us know if you would like to donate assets other than cash and we will provide a letter to confirm the value of the proceeds of sale to help you with your tax return.

Dealing with a loved one’s estate

Gifts to charity after someone has passed away are not subject to inheritance tax, resulting in a tax saving of 40% to those dealing with their estate. In addition, if a person leaves 10% or more of their estate to charity, a reduced rate of inheritance tax of 36% applies to the balance of the taxable estate which does not pass to charity.

Gifts can be planned in advance of someone’s passing by leaving a legacy in the testator’s will.

Alternatively, beneficiaries of an estate who are absolutely entitled to assets can re-direct them to charity by way of a deed of variation which, if completed within two years of death, may for inheritance tax purposes be treated as effective from the date of death.