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- — Our People – Sustainability
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- Accounting & Finance Expertise
- ACCOUNTING ADVISORY
- Advisory
- AIM LISTED COMPANIES
- AIM LISTED COMPANIES
- Alice Stephenson – Founder & CEO, Stephenson Law
- All News
- ALLSTARS EARLY CAREER PROGRAMMES
- APPRENTICES
- April Bembridge – Chief People Officer, Cooper Parry
- Are You Claiming The Right Amount? Gated
- AUDIT – WHAT OUR CLIENTS SAY
- Audit and Assurance
- B CORP
- Bundle and Pricing Options
- BUSINESS SERVICES INSIGHTS
- BUSINESS STRUCTURING
- Business Support And Grants
- Business Tax
- CAPITAL ALLOWANCES
- CAPITAL GAINS TAX
- Careers – Our Roles
- Careers Contact Us
- Careers Trainees FAQs
- Charities
- COMMUNITY
- Construction
- Contact Thank You
- Contact Us
- COOKIE POLICY
- Cooper Parry Book Club
- Cooper Parry Event
- CORPORATE AUDIT
- Corporate Finance
- Corporate Finance – What Our Clients Say
- CORPORATE FINANCE DEALS
- Corporate Finance News & Insights
- Corporate Finance News & Insights
- Corporate Social Responsibility
- Covid-19 Collaboration-news
- CP Futures
- CP Innovation
- CP INNOVATION – WHAT OUR CLIENTS SAY
- CP INNOVATION FULL PAGE. – DRAFT
- CP Tech 100
- CPERS: COOPER PARRY ENQUIRY RESOLUTION SERVICE
- Creative Tax Reliefs
- CULTURE
- DIVERSITY & INCLUSION
- DIVERSITY POLICY
- Early Stage To SME- WHAT OUR CLIENTS SAY
- Ecommerce
- Eddie Latham & PJ Scott – Co-founders, Velocity Commerce
- Education
- EMPLOYMENT TAX
- ENVIRONMENT
- FAQS
- Financial Reporting
- Find Us
- Flexible ‘Finance Bench’
- Future Events
- Galahad Clark – Founder VivoBarefoot
- GLOBAL TALENT PROGRAMME
- GRADUATES
- HEALTHCARE INSIGHTS
- Helena Hills – Founder & CEO, TrueStart
- HIGH GROWTH LOW DOWN
- Homepage
- Homepage
- https://www.cooperparry.com/aim-audit
- Hub CP
- HUB CP – Live Lounge
- HUB CP – Live Lounge Velocity Snippets
- HUB CP – Rob Law Trunki Snippets
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- Impact Beyond Business
- Impact Beyond Business New template
- In Their Words
- In Their Words Retail
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- Inheritance Tax
- Intellectual Property & Patent Box
- INTERNATIONAL TAX
- Investment Calculator UK
- James Hyde – Founder & CEO, James and James
- Jay Richards & Cat Agostinho – Co-Founders, Imagen
- Justin Harling – CEO, CAE Technology Services
- LEGAL STUFF
- Let’s Stop Calling It R&D V2 Gated
- Life at cooper parry
- Lounge Underwear Webcast
- MAKING TAX DIGITAL
- Management Information and Reporting
- Manufacturing and Supply Chain
- Marketing Thank You
- MID MARKET – WHAT OUR CLIENTS SAY
- Mid-Market
- New Hub CP
- New Hub CP Live Lounge
- Newsletter Form
- Newsletter Thank You
- NFP Webcasts And More
- Not For Profit Audit
- Operational Systems & Technology
- Our People
- Meet the Team
- Meet the Team Retail
- Our People – Big Business
- Our People – Board
- Our People – Business Tax
- Our People – Capital Allowances
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- Outsourcing
- OVERSEAS EXPANSION
- Past Events
- Paul Richardson – Executive Chairman, Gymshark
- Paul Turton – CEO, Pact Coffee
- PENSIONS AUDIT
- Personal Tax
- Personal Tax Compliance
- PLACEMENTS
- Preference Centre
- PRIVACY POLICY
- Private Equity Advisory
- PROFESSIONAL SERVICES
- PROPERTY AND LANDLORDS
- R&D Capital Allowances
- R&D Newsletter Thank You
- R&D Tax Credits Questionnaire: Are you eligible?
- Raise investment or debt
- Raising Finance
- Read All About It
- Rebelution 2
- Rebelution 2 Top Tips – Cooper Parry Corporate Finance
- Rebelution 2 Top Tips – Cooper Parry IT
- Rebelution 2 Top Tips – Cooper Parry Wealth
- Rebelution 2 Top Tips – CP Futures
- Rebelution 2 Top Tips – VAT & Brexit
- Research & Development Tax Credits
- Research And Development Tax Credits
- RESIDENCE & DOMICILE ADVICE
- Retail
- Retail Advisory
- Retail Tax
- Rob Law MBE – Founder, Trunki
- Scale Up & High Growth
- SECURITY POLICY
- Service Charge
- Service Charge Accounts
- Service Charge Snapshot
- Service Test
- SETTING UP BUSINESS IN THE UK
- SHARE INCENTIVES AND REWARD
- Share incentives: Annual Reporting
- SHAREHOLDER TAX ADVICE
- Shaun Doak – CEO, React Group Plc
- Small Business
- SNAPSHOT
- Succession Planning
- Supporting start ups
- SUSTAINABILITY
- SUSTAINABILITY ADVISORY
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- Tax Services
- TAX SETTLEMENTS AND INVESTIGATIONS
- Tech & High Growth
- Tech & High Growth – What our clients say
- TEN STAGES TO INVESTMENT
- TEN STAGES TO SALE
- Test2
- This Is Us
- Tom and Tina Warner – Co-Founders, Warner’s Distillery
- TOPICAL TAX UPDATES
- Transaction Deals
- Transaction Services
- Transaction Services – What Our Clients Say
- TRANSACTION TAX
- TRANSFER PRICING
- Trusts and Estates
- UK support for International groups
- VAT SERVICES
- Virtual Bookkeeping
- Virtual FD
- Wealth
- Wealth- What Our Clients Say
- Website How To Guide
- Welcome to the CP Family
- What our clients say
- WORK EXPERIENCE
- XCP Sign Up
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Talking tax often isn’t always popular. But the tax year-end is looming so we must. If you take action now you could make the most of tax planning opportunities still open to you.
Take a look at what actions you could take around Income Tax, Capital Gains Tax, Pensions & Investments and Inheritance Tax below. As always, if you’ve got any questions, we’d love to chat.
INCOME TAX
- Earning between £12,571 and £50,270? You’ll be taxed at the basic rate of 20% (dividends 7.5%).
- Earning between £50,271 and £150,000? You’re in the higher tax band which means you’ll pay 40% tax (dividends 32.5%).
- Your personal allowance is reduced by £1 for every £2 of income above £100,000. This means there’s no personal allowance when income exceeds £125,140. But you might be able to get it back by using our top tips below.
- For earning over £150,000? You’ll be taxed at the additional rate of 45% (dividends 38.1%).
- It’s worth noting that income tax bands change in the new tax year.
Income tax band | Dividend tax rate 2021/22 | Dividend tax rate 2022/23 |
Basic | 7.5% | 8.75% |
Higher rate | 32.5% | 33.75% |
Additional rate | 38.1% | 39.35% |
OUR TOP TIPS:
- The personal savings allowance grants £1,000 of tax-free savings income to basic rate taxpayers. For higher rate taxpayers this figure is £500. Additional rate taxpayers don’t receive this allowance, so if you can, make sure you use it.
- The £2,000 dividend tax allowance is available for all taxpayers. Amounts falling within this allowance are taxed at 0%. Make the most of it.
- You can transfer income-producing assets to a spouse or civil partner to make sure you’re both using all the available allowances. This is also useful if they’re taxed at a lower rate.
- Reduce your higher tax rate liability by reducing your taxable income. This can be done by making payments to a pension plan, making donations to charities under ‘Gift Aid’ or converting income into non-taxable forms.
- Reduce your higher tax rate liability which could lead to great savings this way. This applies if you’re A) earning between £50,000 and £60,000 and you get child benefit, or B) earning above £100,000 and losing your personal allowance.
- Make sure you’re claiming capital allowances when you buy assets that you use in your business. The temporary increase to the annual investment allowance (AIA) from £200,000 to £1,000,000 in January 2019 has been extended to 31 March 2023.
CAPITAL GAINS
- This is a tax on any profit you make when you sell an asset that has increased in value.
- For 2021/22 you may make gains of £12,300 tax-free. This exemption cannot be carried forward into the next financial year.
OUR TOP TIPS:
- Have you used your annual exemption? If not, think about selling assets before 5th April.
- Make sure you’re utilising your spouse or civil partners’ annual exemption by transferring assets to them before selling them.
- Business Asset Disposal Relief (previously Entrepreneurs’ relief) is available on the first £1m of an individual’s lifetime qualifying gains. This can mean that capital gains tax (CGT) is due at 10% rather than 20% but you need to check that this is the case.
- If you own a second home, or a holiday home, you can decide which property is treated as your primary residence, and therefore which property is exempt from CGT. Plan this carefully as the exemption of a gain on one residence means the gain on the other becomes chargeable. You must elect your main residence within two years of purchasing the second one.
PENSIONS & INVESTMENTS
- You can pay up to £40,000 a year into a pension scheme. Unused allowances from the last 3 years can be used if you were a member of a qualifying pension scheme.
OUR TOP TIPS:
- Review your allowances. The £40,000 allowance is reduced by £1 for every £2 of an individual’s total income over £240,000. If your income exceeds £312,000, you have a £4,000 allowance plus any unused allowances from the last 3 years.
- The Lifetime Allowance is the amount of money you can hold in pension schemes without facing penalty tax charges when you take pension benefits. For 2021/22 this figure is £1,073,100 – so make sure you check if your pension pot is at or around this number.
- Take advantage of your ISA allowance, which is currently £20,000.
- If you’re aged 18-39 you can open a Lifetime ISA and put in up to £4,000 a year until you’re 50. The government will add a 25% tax-free bonus to these savings, up to a maximum of £1,000 a year. This £4,000 counts towards your £20,000 annual ISA limit.
- Consider investing in schemes or shares such as Enterprise Investment Schemes (EIS), Seed EIS (SEIS) or Venture Capital Trusts (VCTs). These investments offer upfront income tax relief, but can carry higher risk.
INHERITANCE TAX
- Inheritance Tax (IHT) is charged at 40% on the part of your estate (property, money and possessions) that’s above the £325,000 nil rate band (NRB).
OUR TOP TIPS:
- You can give up to £3,000 each tax year, and if this amount is unused it carries forward for one year. These gifts can be exempt from IHT as soon as they are made. It’s also possible to make regular gifts out of your after-tax income if you have surplus income. It is important to keep records of gifts so that your representatives have a clear record when they’re dealing with inheritance tax after you’re gone.
- Make a will – dying without one may increase tax and mean that assets are not distributed as you wished.
- Review the size of your estate and your will to make sure you benefit from the residence NRB. This is an additional amount up to £175,000 available on top of the individual NRB where the deceased has left a residence to his or her direct descendants.
GET IN TOUCH
This information is not a personalised recommendation. you should always speak to your adviser to get tailored advice before taking action.
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