Personal allowance and tax rate bands

	Spreading income-producing assets between spouses could make use of the lower income tax bands.
	Consider employing family members in a business. Salary amounts should be justifiable and paid over.

Age allowance

	Individuals aged 65 and over are entitled to higher personal allowances. However, where income exceeds £20,100 (2006/07 tax year), the allowance begins to reduce.
	By topping up your income with withdrawals from life assurance investment bonds, there is no loss to age allowance.
	If appropriate, invest in tax-efficient investments such as ISAs.

Pension contributions

	Pension contributions receive income tax relief at your marginal rate of tax.
	Make full use of contribution limits to either your occupational pension scheme or personal plans.

Using CGT allowance for an income stream

	Each individual has an annual CGT allowance. This is £8,800 for the current 2006/07 tax year.
	Consider transferring assets between spouses before sale to utilise both annual allowances and tax bands.

If you would like to discuss your specific options or requirements, please e-mail or contact us.

Levels and bases of, and reliefs from, taxation are subject to change.
Article date: March 2007