Strategic tax planning: what to consider before the budget
As the October 2024 budget looms, both individuals and businesses should gear up for potential adjustments in tax policies. Strategic tax planning can help you navigate these changes smoothly. Here’s a streamlined guide to optimise your strategy before the budget announcement.
Inheritance tax planning
With possible shifts in inheritance tax (IHT) rules, proactive steps are crucial:
- Lifetime gifting: Reduce estate value by making gifts now, as those given over seven years before passing are usually IHT-free.
- Use Trusts: Trusts can manage and pass wealth effectively, potentially reducing IHT liabilities while maintaining control over asset distribution.
- Regular plan reviews: Ensure your estate plan aligns with current laws and personal circumstances, especially with looming legislative changes.
R&D tax relief for SMEs
For innovative SMEs, fully leveraging R&D tax relief can be vital:
- Claim all costs: Include all qualifying expenses such as staff, materials, and software in your claims.
- Thorough documentation: Maintain detailed records of R&D activities to substantiate claims.
- Specialist consultation: Engage with R&D tax relief experts to maximise claims and ensure compliance with guidelines.
Tax-efficient Investments
Prompt action in tax-efficient investments can yield significant benefits amid potential changes:
- Explore EIS, VCTs, SEIS: These schemes provide tax reliefs, encouraging investments in small, high-risk companies.
- Diversified portfolio: Balance risk and reward by utilising these schemes for maximum tax efficiency.
- Stay updated: Monitor any changes to these reliefs to adjust your investment approach accordingly.
Property Ownership Structures
Landlords, consider restructuring to mitigate restrictions on mortgage interest relief:
- Incorporation: This can offer tax advantages, especially with possible changes to individual mortgage interest relief.
- Evaluate ownership: Review your property structures for optimal tax efficiency now and in the future.
- Professional advice: A tax advisor can help explore options that align with your goals while anticipating policy changes.
Conclusion
The October budget can bring both challenges and opportunities. By acting now in areas like IHT planning, R&D relief, tax-efficient investments, and property structures, you can secure a robust financial future. Don’t wait—ensure your strategies are adaptable to any forthcoming changes. Reach out to us now.