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Using your portfolio tax efficiently - family playing chess

Your allowances:

You have a number of allowances available to you each tax year which can be utilised to reduce your tax bill. By using your portfolio tax efficiently you can pay less tax which means you keep more money for yourself. Some of the allowances available include:

·         A personal allowance, - income up to this level is tax free

·         If total income does not exceed the Personal Allowance, you also have a starting Savings allowance

·         Savings allowance – an allowance for interest on savings

·         Dividend allowance for income received from share holding

·         Capital Gains Tax – on the sales of assets  

How are the allowances changing?




Personal Allowance



Starting Savings Allowance



Savings Allowance - Basic rate Taxpayers 



Savings Allowance - Higher rate Taxpayers 



Dividend Allowance



Capital Gains Tax



Some ideas on how to reduce tax

Save tax free using an ISA each tax year and the ISA allowance is increasing from £15,240 to £20,000 in tax year 2017/18. Everyone has their own allowance and Child ISA limits are increasing from £4,080 TO £4,128.

Manage your investments by ensuring that taxable income is paid to spouse or partner who is either not paying any tax, as income is below their personal allowance, or paying lower rates of tax on income.

Planning sale of assets to use up your Capital Gains allowance each year, rather than being subject to tax.

Business taxes – owners or senior executives may be able to reduce the business tax and individual tax by structuring benefits as income, dividends and pension contributions.

Keeping entitlement to benefits – Child Benefit is lost once either partner has an income of over £50,000. By switching income or reducing taxable income by making pension contributions, you may be able to retain all or part of the Child Benefit payments.

Making gifts – You can make gifts up to £3,000 each year to reduce the value of your estate to reduce your Inheritance Tax liability. If you have not used your allowance for the previous tax year, you can make gifts up to £6,000.

Let Origen help you to review your own circumstances, to identify opportunities to save you money.

Retirement planning is complex, but careful planning can provide long term benefits and careful management can help get more income from your fund in retirement – our Consultants can help you to plan for retirement and then manage your retirement income.

Call us on 0344 209 3925

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This article is for information only, based on our understanding of legislation and HM Revenue & Customs practice as at February 2017 and is not to be taken as Financial Advice. Origen are not tax specialists and should you have any concerns with regards to your personal tax situation, we would recommend seeking advice of an accountant.  CA1206 Exp 04/04/18

[ Date Posted: 16/02/2017 09:45:17 ]