Originally featured in the ABWM Magazine, January 2017

As a child I remember watching the 1960’s western the Magnificent 7, which was repeated almost every New Year on the television. The heroes of the film were an eclectic bunch of characters led by Yul Brynner. So riding in on this theme, I suggest considering the following magnificent seven financial bucket list choices for the New Year.

  1. Pension Protection
    Ensure that contributions to your company pension scheme are maximized; so that tax relief is obtained to boost the amount accumulating in your pension pot. Check whether the pension fund is in surplus or deficit.
  2. Forestry Purchase
    Consider investing in forestry; it is not only eco-friendly but has important tax reliefs, in terms of being exempt from inheritance tax as well as being tax efficient, for income (in the felling and sale of wood) and capital gains tax (sale of land and reinvestment).
  3. Holiday Home
    Buy a holiday home to let; either as furnished holiday lettings or as an Airbnb let, these attract tax relief in the form of allowable loan interest, ongoing expenses after which the net income can be invested in a tax efficient manner i.e. dividends, detailed in point 4.
  4. Dividends Tax Free
    A change in the tax law now allows dividends up to £5,000 to be received without tax being deducted. This does not reduce your annual personal allowance relief of £11,000, which would be available to offset the rental income received from the holiday home lets.
  5. Grandchildren’s Trust
    Set up a discretionary trust for your grandchildren so that the amount in the trust is protected for their benefit. This also has the advantage that the amount placed in trust ‘skips’ a generation for inheritance tax purposes and you control who gets what.
  6. Charitable Relief
    The UK inheritance tax rate of 40% can be reduced to 36% on the remainder of your estate if 10% or more of your estate goes to charity. Ensure that your will states this.
  7. Seed Enterprise Investment Allowance (SEIS).
    SEIS investment helps others (including family members) start a business; the amount invested gives you an income tax relief (50%) and capital gains tax relief (50%) which you can offset elsewhere. Any profit on the investment is not taxable when/if the investment matures after three years!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s