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Tax Optimisation

Financial planning is about helping you to build a plan for the future whilst ensuring you extract the maximum from your assets, utilising the available allowances and exemptions throughout this journey. Put simply, the aim is to use the minimum amount of your own capital and achieve your goals.

Tax Optimisation

Your Chartered Financial Planner will have many years’ experience advising and researching a number of tax wrappers.

They will consider the more commonly utilised wrappers such as Pensions, Individual Savings Accounts (ISAs) and National Savings offerings. Often advice is required in relation to the constantly changing pension rules, most notably with regards to the Annual and Lifetime Allowance and income options at retirement.

Clients may not have given due consideration to many of the other allowances and exemptions on offer to both themselves and their families. Some examples and brief descriptions are:

Capital Gains Exemption

Capital Gains Tax is a tax on the profit made when an asset is sold for an increased value. Individuals have a tax-free allowance for capital gains, called the Annual Exempt Amount. This allowance cannot be carried to future years so is a ‘use it or lose it’ tax allowance which we often find has been overlooked.

Venture Capital Trust (VCT)
and Enterprise Investment Scheme (EIS)

These are extremely tax efficient investment vehicles which for certain investors can be used to complement a core investment strategy. Each has nuances but as a broad overview they benefit from 30% initial tax relief and tax-free capital gains. VCTs can also produce a tax-free dividend income and EIS can provide loss relief plus the ability to defer an existing capital gain on another asset. It should be noted that these are high-risk investments and should only be considered by experienced investors. Metis Wealth can provide advice and extensive due diligence of the opportunities in the marketplace at any given time.

Business Property Relief

This provides an Inheritance Tax reduction (100% in most cases) to certain assets after a minimum holding period of two years. Unlike other types of IHT planning, the client does not have to give away the asset.

Gift Hold-Over Relief

If you give away certain assets, or sell them below their real value, you may be able to claim Gift Hold-Over Relief which provides that you do not pay capital gains tax at the time of disposal, rather the recipient pays when they dispose of the asset as if they had held it for the entire period.

Offshore Investment Bonds

An Offshore Bond is an investment tax wrapper set up by a Life Insurance Company in a jurisdiction with a favourable tax regime, such as the Isle of Man or Dublin. Investors can benefit from growth which is largely free of tax, often called ‘gross roll-up’, and have control over the timing and quantum of their UK tax liability on the investment. These wrappers also provide a tax deferral facility enabling investors to withdraw 5% of the original investment each year with no immediate liability to UK tax.

Some of these may be more suitable than others and we will guide you based on our experience and your individual needs.

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Phone: 0345 450 5670