COVID-19 Update: Personal Tax Planning in Lockdown
We all have a lot on our plates at the moment – trying to keep our families and our loved ones safe, our businesses afloat, our children entertained and educated whilst we’re working from home, as well as looking after our own physical and mental wellbeing.
Amongst all the news unfolding every day in this global health crisis, you could be forgiven for letting the start of the new tax year on Monday pass you by.
In addition to the health concerns, this is a time of great economic uncertainty and, as we start to adjust to the new “normal”, many people’s minds are turning to their finances and how to make sure they and their loved ones are provided for now, and in the future.
Of course, we will want to make sure that our Wills are up to date and that arrangements are in place to manage our personal and business affairs in the event that we are physically or mentally incapable of doing so.
But the new tax year also brings fresh opportunities to pass wealth to the next generation, in a tax efficient way, during our lifetimes. Each tax year, each taxpayer gets a fresh “annual exemption” of £3,000. This means you can give away up to £3,000 of assets, without the value of the gift forming part of your estate for inheritance tax purposes. There is also a “small gift exemption” of £250 per person per tax year, so long as you have not used another exemption on the same person.
With so much uncertainty in the markets, now might actually be a good time to make more substantial gifts of property or shares to your children or grandchildren, which might otherwise attract a large capital gains tax bill.
Rishi Sunak’s inaugural budget, which already feels like a lifetime ago, contained no inheritance tax surprises, despite calls for simplification of such a complex tax system and this might be further reason to consider tax planning before any changes are made.
Of course, everyone’s circumstances are different and legislation can change over time. You should take advice from your financial and legal advisers before taking any action.
If you would like to speak to one of our dedicated estate planning team here at Anthony Gold, please feel free to contact us here.
*Disclaimer: The information on the Anthony Gold website is for general information only and reflects the position at the date of publication. It does not constitute legal advice and should not be treated as such. It is provided without any representations or warranties, express or implied.*