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How to save tax

There are a number of legal ways to save tax, so it’s as well to state the legal  way of saving tax, which is tax avoidance, as opposed to the illegal way, which is tax evasion, and for which you will spend time at her majesty’s pleasure.

The government actually helps you with tax avoidance in a number of ways: tax allowances; tax exemptions; and not least, poorly drafted legislation (or legislation purposely drafted with loopholes, I’m not sure which).

So we’ve all got a personal allowance, and you can find details about allowances on almost any accountancy website.

Now people sometimes say, there’s nothing wrong with paying tax, so why try to minimise it?

But I have yet to meet someone who said, ’I don’t want to use my personal allowance, I’d like to pay tax on all my income’.

Remember, the government  is taxing you on all your income, and on some of it more than once.

For instance, you’ve paid income tax and then from this taxed income, when you buy something, you probably pay VAT (value added tax) as well.  And take petrol, you buy petrol/diesel with taxed income, the petrol itself is taxed as well, (they call this tax ‘duty’) and then on top of this you pay VAT on the petrol and the duty!

So if you spend all your life paying tax on income, there is nothing wrong with making use of all your allowances and exemptions to minimise the tax you pay.

And if you have created wealth, large or small, out of income that has already been taxed, why, on your death should you pay an extra 40% tax on your estate (if your estate exceeds the current allowance on which you do not have to pay tax).

Finantium can help with strategies and advice to help you minimise the tax that you pay - this could be as simple as equalising assets between husband and wife (or civil partners) or more complex arrangements.