Avoid Income Tax
Seeing how much income tax you’ve paid can be a shock! Luckily, there are ways you can avoid it
Pension contribution
It’s something (nearly) everyone has, and most people are familiar with.
For someone who earns £60,000 per year, if they pay £10,000 into a pension, there will be a tax saving of £4,000 on their tax bill.
But, with a pension, when the money comes out, everything after the 25% tax free cash, is subject to income tax.
For some people, there may be NO tax savings from their pension contribution. See pension contributions for more information.
There are other, lesser known but possibly more effect investments you could make…
Venture Capital Trust
A Venture Capital Trust (VCT), is a lesser known tax saving investment, but one that must have HMRC approval.
A VCT also gets tax relief, but unlike a pension there is a flat rate of tax relief of 30%.
So, if you paid £100,000 into a VCT you would have a £30,000 reduction in your income tax bill. But, when the money comes out of a VCT there is no income tax to pay at all.
And, a VCT can be taken out tax-free after just five years, there are no age restrictions like a pension.
Contact us by calling 01793 686393 to lower your income tax today!
Pension vs VCT: How do they compare?
Although a VCT receives only receives 30% tax relief at the point of investment, when the money comes out after 5 years, there would be no income tax to pay on it at all – unlike a pension which just defers the tax.
For more information click below:
Investing money in the right investment is an effective and perfectly legal way to reduce your income tax liability, for a no-obligation chat with a UK Qualified Independent Financial Adviser, phone now on 01793 686393 or contact us online.