Tax Planning Tips - Special Report
The March 2021 Budget was inevitably dominated by the prospect of paying for the Covid-19 crisis. The Chancellor has so far adopted the stealth option of freezing most personal tax allowances and bands until 2026, in effect raising taxes over the period.
The inheritance tax (IHT) nil-rate band will now remain at £325,000 until April 2026, making more estates liable to IHT, although the introduction of the residence nil-rate band from 6 April 2017 has partially offset this. More tax rises can be expected over the coming years as the government seeks to address the spending deficit.
The Office of Tax Simplification (OTS) has recently carried out reviews of both IHT and capital gains tax (CGT), which could lead to significant changes. The CGT review recommended aligning CGT rates more closely with income tax rates, drastically cutting the annual exempt amount and greatly limiting business reliefs. The IHT review considered areas of complexity, including lifetime gifts, business relief and agricultural relief.
This guide highlights 50 ways in which you can currently use certain tax reliefs to your advantage, and how to avoid some of the tax penalties. It can help you navigate the complexity of certain tax rules and create more tax-efficient plans.