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Using all your allowances and exemptions

This post was triggered by an article in the Telegraph.

One way to pay less tax is to make sure you use all your allowances and exemptions. A tax exemption that is often overlooked is the Capital Gains Tax (CGT) exemption.

For the current tax year you have enjoy £11,000 of capital gains tax free. This could be worth £4,950 a year per person. For a couple over the next 10 years this is nearly £100,000.

The problem is how do you create, make or crystalise gains?

Well, there are different ways to do this depending on the type of assets you hold. But, you can also look to create gains by the type of investments you make.

Sackmans is not registered to provide investment advice but we can comment on the tax on different types of investments.

One type of shares which are not well known is called Zeros…short for zero dividend preference shares. As the name suggest, you do not get paid a dividend (which would be income). Instead, the idea is that you make a gain from the investment.

The use of the word “preference” means that shareholders get paid before others.

If you are interested in paying less tax, fed up with low returns from more well-known shares then perhaps this is an opportunity for you.

I suggest you read the Telegraph article, take professional advice and let me know if you decide to make any investments.