Tax experts are encouraging taxpayers to begin preparing for their self-assessment tax return before Christmas in order to avoid a mad rush in the New Year.
Justin Smith, a tax director at Leeds-based Kirk Newsholme, has warned that the January self-assessment deadline is edging ever-closer and that the Christmas period will come and go in a flash.
He said that planning early can enable taxpayers to ensure that all of their affairs are in order and that they are claiming all the necessary expenses and reliefs.
Justin added that the end of another year was the perfect time for individuals to consider their wider tax planning and consider whether savings can be made elsewhere, too.
“When it comes to personal tax, a broad range of reliefs and allowances can be applied to the likes of Capital Gains Tax (CGT), business tax and Inheritance Tax (IHT), and each of these should be carefully considered,” he said.
“CGT, for example, has a reputation for leaving people with a hefty tax bill on disposal of valuable assets. However, careful planning about how and when an asset is disposed of can have a major impact on the size of the bill. Likewise, making careful use of other allowances can see your tax bills shrink considerably.”
He added that there were “a similarly wide range of allowances and reliefs” available affecting IHT, such as the Residence Nil-Rate Band (RNRB) – which provides an additional tax-free allowance to people who choose to leave their main home to direct descendants.
“The best way to make sure you are tax-efficient in all areas of your life is to periodically review your tax planning and to reassess your liabilities each time your circumstances change,” Justin said.
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