….Or Paddling A Stream, let your thoughts turn to… taxes. Sure, it’s a lot easier not to think about taxes until you have to, but by then it’s usually too late to do anything that might make a difference. Late summer, when your blood pressure is nice and low, is the perfect time to decide whether you need to take any steps to prepare for this year’s taxes. Consider the UK tax table 2014 before you stop reading:
- £0 – £31,865 pay tax at the basic rate of 20%
- £31,866 – £150,000 pay tax at the higher rate of 40%
- Over £150,000 pay tax at the additional rate of 45%
A National Insurance Contribution is also charged at the following, to taxpayers earning;
- Below £153 per week – Nil
- £153 – £805 per week – 12%
- Over £805 per week – 2%
Apologies if your blood pressure just jumped higher. Take a deep breath and decide whether these tips can help.
- Manage your taxable income effectively. It may be possible to reduce your taxable income by deferring it, making contributions to pre-tax investments (like retirement accounts), and making gifts of income producing investments or cash to family members.
- Generate investment losses. Selling depreciated assets can help generate losses and losses may offset capital gains.
- Transfer savings and investments to your partner. Transferring savings and investments to your partner can save tax if you are part of a couple where one person is in a lower tax band than the other.
None of the above is intended as tax advice. It’s food for thought. Before you do anything, talk with a tax professional about your financial situation.