13:02 22 March 2013
Would you like to get a nice fat refund check from the government this year, rather than paying them more than you’ve already paid? Or maybe you’d just like to be able to pay less than the taxes you normally pay? It’s possible with the right knowledge and preparation.
Most of us spend very little time throughout the year thinking about taxes, but when tax season hits everybody’s scrambling to get their taxes filed and hoping for the best.
Understanding the law and changes that have been put in place for the current filing year can influence how much tax you have to pay. It is very important that you know how these laws and changes directly relate to you and your taxes.
For instance, did you know that as of April 6th, 2013, the tax rate for income over £150,000 will be reduced from 50per cent to 45per cent? That’s a reduction that can make a huge difference in regards to how much tax you owe.
If you use gifting as part of your tax strategy, be sure to maximize your limits before April 6th. You are allowed a £3,000 gift per year, so take advantage of the full amount.
Many gifts are exempt from IHT, like gifts to certain charities and gifts between spouses (as long as there is no gain or loss received). One of the best things you can do in preparing for tax returns is to keep good records of all gifting and charitable donations.
When implementing a tax strategy, always make sure not to veer outside of the law in an attempt to be aggressive. It is far better to err on the side of conservatism that to go against tax laws and ordinances in a way that will eventually cost you far more than it will save you.
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