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2021 Budget tax changes expected. What should you do?

Keep a calm head and do not succumb to alarmism.

There has been rampant speculation about potential tax changes to meet the rising costs of the Covid-19 pandemic.

How do you plan for the unknown?

Our advice is the same as it is every year:

“Know where you are and do the simple things well.”

Easy to say, but what does it mean?

  • You should know the approximate market values of all your assets: Pensions, investments, Property, Chattels, and Cash.
  • You should know the capital gains base costs of those assets.
  • You should know your remaining pension allowances.
  • You should know your Inheritance Tax position, regardless of whether you are 20 or 120.
  • You should know your taxable income for the year.
  • You should know if you have any tax residency or domicile issues.

Once you know where you are, you then look at the available tax allowances and see what impact they would have on you.

Some of the more common tax reliefs - “band extenders”:

  • Gift aid
  • Pension Contributions

There are also the largely underutilised - "tax reducers":

  • Enterprise Investment Schemes
  • Venture Capital Trusts

These are just a few of the numerous government tax reliefs currently available, and you should be adapting your finances to make use of them. The rules will change every year and so should you.

At Anderson & Edwards, our goal is to build a picture of your finances and implement a strategy to improve that picture over the next 5, 10, and even 20 years.

We are not just here to complete a tax return; we are here to be dynamic.

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