We help each of our clients to accumulate wealth in the most tax efficient manner in line with their specific financial objectives. This accumulation of wealth is a uniquely individual process. Once accumulated, this wealth will be protected through a variety of strategic preservation planning processes in readiness for eventual distribution or utilisation.
Albert Einstein said “The hardest thing to understand in the world is the income tax”.
This from a man who had developed the general theory of relativity one of the two pillars of modern physics. We wonder what commentary he would make were he alive today and living with the forces and complexity of 21st century taxation.
It is therefore no surprise that City Capital will focus heavily on taxation mitigation at all stages of our client’s personal and corporate life.
We are not taxation Accountants and do not promote borderline or aggressive taxation mitigation schemes, which we believe will fall foul of the General Anti Abuse and General Anti Avoidance Rules.
We do however promote any and all legitimate planning efficiencies for our clients in delivering our holistic approach to financial planning. We expect these advantages to create substantial new, repeatable income or capital surpluses, which when appropriately reinvested; will Dynamise further accumulation of wealth.
The following but not exhaustive topics of planning will be of interest to most: (Please bear in mind that the FCA do not regulate tax advice)
This is not so relevant for Employees who are greatly restricted by the PAYE system. Apart from use of Salary Sacrifice and Pension contributions, Employees will have to generate wealth from Net Income.
Shareholding Directors on the other hand, who will have the capacity to determine their own Remuneration strategy within the guidelines set out by Companies House and HMRC will have a number of further opportunities to manage, control and defer taxation.
This control is invaluable and can make a significant difference to the amount of taxation paid and wealth accumulated.
CCA recommend that in all circumstances, Business owners explore the benefits of a personalised Remuneration Strategy. This is in effect a summary overview of a client's existing financial health including an Analysis of Assets, Liabilities, Income and Expenditure together with a defined strategy on immediately available taxation savings and recommendations for distribution of Company Profits.
Depending on the depth and complexity of client information, fees for this service range between £250.00 and £1,000.00. Significant immediate taxation savings and efficiencies may be expected from this process.
Business owners will on a day to day basis have their eyes firmly fixed on cash flow, profitability and income. But at some point they will have to or need to retire or take a back seat in the organisation.
It is imperative that early planning takes place to outline the critical points on the journey to financial independence.
One of the most under used allowances available to UK taxpayers is the Capital Gains Tax exemption of £11,300 pa. If this annual allowance is not used, it is lost. That is a waste, particularly as this allowance can in effect be used to increase net growth and produce tax free income annually.
CCA have a highly sophisticated system capable of recognising client Capital Gain levels at any point in the annual fiscal year cycle. We are also able to automate the crystallisation of these gains to capture maximum effect.
Our Tax Harvesting system is state of the art and available to non clients on a fee basis.
It goes without saying that everyone should have a valid up to date Will. To die Intestate is more than poor planning.
As da Vinci says: While I thought that I was learning how to live, I have been learning how to die.
It does come to us all.
As JOHN MAYNARD KEYNES said:
The avoidance of taxes is the only intellectual pursuit that still carries any reward.
£860,000 is the average net capital value of taxpaying estates in the UK.
This is probably a little bit higher than you expected. But with the Nil Rate Band (exemption level) fixed at £325,000 per person together with increasing Property values, it may not take substantial liquid assets to breach IHT thresholds.
Indeed a family with a home worth £750,000 in isolation is already in liability as would the family with a £600,000 home and an ISA portfolio of £200,000.
And so the calculations continue.
City Capital, in tandem with respective tax specialists as required, can recommend how best to assess and minimise the impact of inheritance tax. Our advice ensures that all available exemptions and allowances are utilised.
To help mitigate tax, there are many possible courses of action, including efficient wills, trusts, life assurance, gifts and creative investment approaches, which crucially allow continuing control of your money.
It is critically important to establish clear objectives and plans should always be reviewed as clients get older or their circumstances change. A client in their late forties for example, might not yet be ready to pass wealth to their children until feeling comfortable that the asset would not be needed for personal needs. Indeed, this could still be the case for those aged in their sixties and seventies. This is a legitimate recurring dilemma and is best handled by a combination of solutions.
Sweeping changes to Pensions came into force on 6 April 2006 - dubbed A-Day. The aim of these rules was to make pensions simpler and more straightforward.
Unfortunately, persistent Government interference has had the reverse effect. Pensions continue to be one of the more complex technical areas of financial planning.
We simply cannot devote enough space to all relevant aspects of this key planning area.
We strongly recommend that you review existing arrangements and discuss the benefits of each and every prospective Pension contribution and how it may impact on your lifestyle as well as on your corporate and personal taxation liabilities.
Please be reminded that the use of Pensions as a strategic Remuneration and Investment tool can be critical to the management of taxation liability, extraction of funds from companies and development of long term flexible income.
We help to maximise the effect of this powerful planning tool.
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