Tax Planning

Inheritance tax can cost your loved ones hundreds of thousands of pounds and in many cases it is possible to mitigate all or most of the charge without resorting to abusive tax avoidance.

With house price inflation the government tax take from inheritance tax has increased significantly in recent years due to frozen tax thresholds and so now more estates are now at risk of paying the tax.

With careful planning there are several options that you can consider eliminating, reducing or offsetting the potential tax due. We can explore and recommend the effective ways for you to limit the impact of any tax.

The Lifetime Allowance is the maximum amount you can take in pension benefits during your lifetime from all pension schemes before an additional tax charge is incurred. If the Lifetime Allowance is exceeded, you will be subject to the Lifetime Allowance charge.

How this charge is applied depends on how you access pension benefits and how you elect to pay the charges. A charge of 55% is applied to excess lump sums and 25% on excess income drawn. The Lifetime Allowance charge is in addition to usual income tax that is applied.

The Annual Allowance is the maximum amount you can contribute to a pension in a tax year. With the Teachers’ Pension being Final Salary, the amount used in this calculation is based not on the amount of money deducted from your wages, rather the value of the increase of the notional value of the pension.

Because the Teachers’ Pension is based on earnings, this has meant that many teachers have fallen foul of Annual Allowance breaches – particularly following a promotion resulting in very large and unexpected tax bills.

We can produce personalised reports for you, the cost for a combined report is £995 Plus VAT.

The Financial Conduct Authority does not regulate Tax or Estate Planning advice.