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Financial Planning for the End of the Tax-Year in your dental practice

 

Home/Financial Planning for the End of the Tax-Year in your dental practice

Frank Taylor & Associates questions whether you are making the most of your allowances in your dental practice

We are approaching the busiest time of the year for financial planning, where everyone scrambles to make use of allowances and tax-reliefs before April 6th arrives. Now that everyone has settled their January tax liabilities the mind turns to ways to reduce them, as well as where to invest spare capital to grow and provide for your family in future.

There are a number of investments which are widely implemented at this time of year, are you making the most of your allowances?

  • Personal Pension Contributions

With the newly introduced pensions flexibilities in place, Personal Pensions are more popular than ever. You will receive tax-relief at your highest rate on personal pension contributions, so these are the first place most investors look at the end of the tax-year. The annual allowance is £40,000; however you must have earned as much as you contribute to qualify for full tax-relief. You can also make use of previously unused allowances from the past 3 tax-years through a process called ‘carry-forward’.

Beware – the Lifetime Allowance – currently at £1million, if you exceed this then you will be taxed.

  • ISA Contributions

ISAs have been around for 20 years and form a large part of investors portfolios. This is due to the fact growth within and income from an ISA is not taxable. You can get access to a wide range of stocks & shares, giving your ISA the opportunity for good long-term growth. The annual allowance is £20,000 per person and if you don’t use up your annual allowance by the end of the tax-year, you lose it!

  • Investments Providing Income-Tax Relief

After a realisation of the high amount of tax you have to pay in January, you will most likely want to look at ways to reduce this liability. Pensions can be useful to do so, however what if you are up to your maximum allowances? There are a range of investments which provide income tax relief from the government at 30% of the invested amount (Enterprise Investment Schemes and Venture Capital Trusts) and these can be very useful to reduce income tax liabilities and also diversify a client’s portfolio from the global stock markets. These investments will usually be high-risk and are not suitable for everyone. You should always seek independent financial advice and review carefully before considering these types of investment.

If you would like more information please give us a call and we will signpost you to a dental specialist IFA who understands dentistry and your financial planning needs.

Frank Taylor & Associates

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