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You may be familiar with the expression “it’s not how much you make, it’s how much you keep.”
But these days you can actually pay your hardearned money into savings and investments and claim tax relief or even get a tax refund.
High earners are facing the most unfavourable UK tax environment for over 20 years, but there are plenty of tax-efficient solutions available including:-
• Business Premises Renovation Allowance, which is one of the few remaining schemes that provide unlimited marginal rate income tax relief (up to 50% tax relief for high earners from April 2010).
• Venture Capital Trusts with 30% income tax relief available provided there is a capital presentation strategy to reduce risk.
• Student Accommodation Funds with a 12.2% annualised return which can be tax-free in the right circumstances.
• Protected Enterprise Investment Schemes which offer not only capital gains tax deferral, but also clawing back capital gains tax refunds on gains made up to three years previously and in addition qualify for 20% income tax relief this year or even last year as well as inheritance tax relief after two years investment.
• Ground Rent Income Funds with double digit returns which again can be tax-free in the right circumstances.
• Self Invested Personal Pensions where you can maximise tax relief with over the limit contributions, transfer in your institutional pension fund to buy your business property and have the opportunity to release pension cash
without having to draw down retirement benefits.
• Employee Benefit Trusts which, whilst not being investment vehicles in their own right, can be used to extract profits from companies tax-free and qualify for relief from corporation tax, national insurance, personal income tax and inheritance tax.
• All these are genuine legal products and all are approved by HM Revenue & Customs, but it is highly recommended that you seek professional advice before you make any financial commitment.
Attend the free 'Save tax, save money' event.
Norman Snodgrass, senior director, Mayes Business Partnership.
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