For managing wealth, it is essential to give considerable importance to tax planning. Both the benefits and consequences of having effective tax strategies play a significant role in the lives of individuals with high net worth. Planning enables the fulfilment of financial goals while ensuring compliance with HMRC regulations. When a solid plan is in place, it helps preserve wealth. Business accountants in Yeovil can assist with tax planning, particularly for individuals with substantial net worth.
Most business owners have complex financial arrangements. Here is a guide that can help with core responsibilities. It is essential to consider key areas to maximise the benefits of tax allowances.
Key Areas To Consider For High-Net-Worth Tax Planning
Income Tax Planning
When there are multiple income streams—such as businesses, rental properties, and dividends—effective structuring allows for maximising tax benefits. In some cases, liabilities may not escalate. Professional accountants recommend balancing business income with earnings from rental properties and dividends. It is also advisable to monitor pension contributions to minimise taxable income. This strategy may help secure your financial future.
Capital Gains Tax (CGT)
Evaluating tax-free allowances becomes essential when attempting to sell high-value assets, such as properties and businesses. Proper planning can help reduce or avoid CGT, which can significantly impact profit margins. It’s wise to consider options such as Business Asset Disposal Relief. Gifting property to a family member may also be beneficial, as it allows the use of their CGT allowance. However, it is necessary to review recent budget changes, as some gifted properties may now be subject to CGT.
Inheritance Tax
High-net-worth planning helps protect wealth for future generations. Chartered accountants in Somerset take inheritance tax (IHT) into account. The current threshold for IHT in the UK is £325,000. If the estate exceeds this amount, a 40% tax applies—unless the property is left to a spouse or civil partner. When leaving a home to children, the threshold increases to £500,000.
Planning strategies for high-net-worth individuals around IHT can include creating a trust for assets. Additionally, regular gifting can decrease tax liabilities.
Property Tax Planning
With a property portfolio, individuals may face tax liabilities such as rental income tax and stamp duty land tax. Careful management can help reduce these liabilities. One effective strategy to maximise tax benefits is to set up a limited company.
Talk To Experts For Advice
The complex nature of high-net-worth tax planning makes it essential to seek guidance from business accountants in Yeovil. Whites Chartered Accountants offers high-quality accounting services. Our professional advice can help ensure a secure financial future. A customised plan provides a tax-efficient and compliant approach to protecting your property and assets. We cover all aspects of income tax, CGT, inheritance tax, and other related requirements. Please get in touch with us to learn more.