This page explains how a couple can enjoy over £65,000 per year of tax-free gains through careful planning and use of annual allowances.
When investing for income the key number to focus on is what you will get after tax; this will be the money you can spend each month.
Most people these days will create their later life income from a number of sources that might include:
- personal pensions or SIPP accounts
- the state pension
- occupational pensions
- individual savings accounts (ISAs)
- general savings accounts
- property rental
- part time work
A key part of deciding where and in what to invest the liquid elements of your overall assets should be tax planning, taking advantage of the UK’s annual tax allowances, varying tax rates and common state sponsored tax efficient savings accounts.
Put simply, paying less tax means needing to earn less to get the same net income. Needing to earn less to meet your net monthly cash needs when it comes to investing could mean:
- retiring earlier than you think
- taking less risk with your investments
- preserving your investment capital so income lasts longer, or capital can be passed on.
Important Notes
Tax issues will depend on everyone’s individual circumstances. Future tax rates, allowances, tax types and the tax treatment of savings and pension accounts will be subject to change. Tax planning needs to be a regular ongoing process.
Non UK resident tax payers will need to get advice on the taxes payable in their country of residence.
Tideway are not tax advisers and if you have any doubt, you should seek specialist tax advice.
- The content of this document is for information purposes only and should not be construed as financial advice
- Please be aware that the value of investments, and the income you may receive from them, cannot be guaranteed and may fall as well as rise
- We always recommend that you seek professional regulated financial advice before investing
