Private Insight
Planning your financial future, and how to get there
If you are considering working with a financial planner, it is important that you first establish your aspirations and objectives.
Article
5 min read
Tax Planning
No one likes to pay tax on their hard-earned money but few actually understand the intricacies of the UK tax system. Fortunately, you don’t have to tackle Tax Planning alone. A trusted Financial Planner can help you to navigate tax complexities, and identify the best structures to preserve your wealth.
That is our role at Investec. First, we'll get to know you and understand your goals. Then, we'll form a clear idea of the specific tax reliefs and allowances to which you’re entitled. From minimising your income tax to keeping a watchful eye on any capital gains, we will plan your investments efficiently, making sure that you save money, by paying exactly as much tax as is necessary.
Higher-rate tax-payers in the UK are missing out on £769 million each year in unclaimed pension tax relief alone.
* PensionBee, 2020
Why is Tax Planning important?
Depending on your circumstances, you might have a number of different goals for your wealth. Whether you want to drive growth, provide an income, or simply preserve what you have, Tax Planning plays an important role in making the most of your assets.
When it comes to Investment Management, the first thing is to ensure that your portfolio is well-diversified and tailored to your particular needs. By itself, however, this is not enough to provide maximal returns. Tax is an expense that dampens the growth of your assets. Without proper planning, you may find that your returns do not meet your goals.
Similarly, effective tax management can give you more control over what happens to your wealth when you are gone and allow you to transfer more of it to your loved ones. Many tax-efficient arrangements also offer Estate Planning flexibility, with some structures even able to reduce inheritance tax liability for your beneficiaries.
Taxes are burdensome and nobody enjoys paying them. Fortunately, you can do much to lighten the load through diligent preparation.
Do I need help with Tax Planning?
There are several things for which you might need to pay tax: your income, the growth of your investments, inherited assets and more. When you need to pay tax and how much you need to pay depends on a number of circumstances. This can make it difficult to work out how much you owe if you try to do your Tax Planning yourself.
As a high-net-worth individual, it’s likely that your tax affairs are more complex than usual. Enlisting a Financial Planner to help you with wealth and tax management will allow you to pay exactly as much as you are required to, without ever unnecessarily giving up hard-earned money that could be passed on or put to work elsewhere.
At Investec, we can use our expertise to structure your assets in a tax-efficient manner. By working with us, you can ensure that your portfolio is streamlined in a way that will conserve as much of your wealth as possible.
Our areas of Tax Planning expertise
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Tax structures
With literally hundreds of reliefs available and a constantly changing rulebook, the key to tax-efficiency is to find the best tax arrangements for you as an individual. We find the most effective combination of tax structures – from ISAs and investment bonds to pensions – to suit your personal circumstances and minimise your tax bill.
Inheritance Tax
Each family’s circumstances are unique, but everyone wants to make the transfer of wealth from one generation to the next as smooth as possible. Tax management is an important part of making that happen.
We use a combination of proven and effective strategies – including gifting, trusts, pensions and reliefs – advising you on the best options and tailoring them to your specific requirements.
Capital Gains Tax
It may be a nice problem to have but if your investments are performing well, you could find yourself facing a substantial Capital Gains Tax (CGT) bill on your profits. While CGT is one of the more complicated taxes, it also offers many reliefs and exemptions.
We guide you through the maze of tax mitigation strategies to find the ones that work best for your personal circumstances, saving you money by planning in the process.
Start your Tax Planning today
Talk to our expert team and see how Investec can help you to plan for your ideal future.
How does the process of Tax Planning work?
The goal of Tax Planning is simply to arrange your financial affairs as efficiently as possible so that you and your family pay the minimum amount of tax necessary. That may sound intimidating, but our expert Financial Planners can build a tailored solution around your needs and take care of the complexities on your behalf. Here is how the process works.
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Step One
Understanding your current situation
We will sit down with you to create a clear picture of your finances. Together, we will map out all your sources of income, savings and investments, as well as take note of your debts and regular expenditure.
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Step Two
Identifying opportunities for efficiency
When we have a clear view of how your finances are currently structured, we will use our expertise and knowledge to establish opportunities to reduce your tax burden. Looking at areas such as income tax, CGT and Inheritance Tax (IHT), we will find ways for you to organise your money more efficiently.
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Step Three
Implementing your personal plan
After identifying where you can save money and reduce your liabilities, we'll discuss which tax structures you’d like to put in place to preserve more of your wealth for you and your family. From tax-efficient investment wrappers to schemes, trusts and shelters, you can choose your preferred planning combination to achieve your goals.
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Step Four
Continually reviewing your plan
Legislation is always changing. That’s why it’s vital that we constantly reviewing your personal Tax Planning strategy in the context of what is new, to ensure that it is as tax-efficient as possible.
Don’t leave it too late. Act now.
Would you like to have an informal, no-obligation conversation about Tax Planning? Do you have any questions about how we can help you? Please don’t hesitate to get in touch.
Grant, Scotland (name changed to protect anonymity)
Without Investec, it would not have been possible to feel at ease in dealing with our finances ourselves.