Family Tax Planning

Wouldn’t it be great to reduce the financial burden of having a family by maximising all of the reliefs and exemptions that are available to you? As most of these are imbedded into legislation it is likely that most families will forgo these which ends up costing them hundreds even thousands in unnecessary tax.  At ISIS we take a holistic approach to looking at your family affairs taking into consideration the following; 

Ways to maximise children’s tax credit claims & ensuring that child care vouchers are claimed while they are available

If you run your own business then there is the potential to maximise both your children’s tax credits and child care vouchers by choosing the way you pay yourself.

Tax credits are determined only on the taxable income you receive. If you have an undrawn director’s loan account in your company or are a sole trader or partnership, we can look at structuring your pay differently or incorporating your business to maximise your tax credit claims.

Currently a basic rate taxpayer can receive £55 per week in vouchers as part of their salary to go towards child care costs. If you pay yourself by salary and dividends and are a higher rate payer you are still entitled to the £55 per week as the amount you can claim is only dependent on you employment income and not dividend income.

A lot of parents also don’t know that childcare vouchers can also be used for much more including qualifying after school clubs & breakfast clubs

Advising on tax efficient ways to pay school or University fees

We can also look at structuring your business suitably so that some of your business profits are paid into a trust of which your children are beneficiaries of. This way the income they receive is likely to be tax free because of their personal allowances. By structuring it this way it potentially saves the parents £000’s as their taxed income isn’t used to pay these fees.

Advising on how to make tax efficient gifts to your children, including ways to pay for your children’s wedding and escaping a potential inheritance tax charge

The cost of getting married is expensive and children often look to their parents for support. A normal gift of income from parent to child is a potentially exempt transfer from inheritance tax and they must out live seven years for it to become totally free from any inheritance tax payable by the child in possession of the money. Using statutory reliefs there is a way of gifting £22,000 to your children that is completely free from inheritance tax providing that it is for their wedding. 

Advising on the protection of any assets that you have gifted to your children so that they don’t sell them or are forced to sell them

It is not uncommon for parents to want to gift some of their assets to their children during their lifetime. One of the biggest fears for parents is that the child doesn’t retain the asset. A simple trust structure can be used that gives the child full use of the asset or full entitlement to its income at the same time as protecting the asset from unforeseen circumstances. For example your child becomes bankrupt where under normal circumstances they would be required to sell the asset. Using the trust any event like this would immediately transfer the ownership of the asset to the trustees and it would then be their own discretion what to do with it.

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