March 2017

Create your own Government Approved Tax Haven


With proper advice it is possible to create your own personal tax haven. Individuals and businesses can benefit from knowing what allowances reliefs and strategies are legitimately available and how to use them without fear of challenge.

We should not of course underestimate the strength of such fear. HMRC has done such a good job instilling it which serves it very well.

Indeed when it comes to anything remotely resembling a reduction of one's tax bill the public & their advisers become nervous. There is a genuine sense of concern over any suggested action that results in an attractive tax saving which can cause even the most acceptable strategies to be rejected by those who could legitimately benefit. This fear driven resistance to tax saving extends to the use of carry-forward relief on pension contributions; many aspects of inheritance tax planning; anything at all offshore and business property relief schemes to name but a few.

On business property relief one can see how an arrangement that is Inheritance Tax effective after two years but still remains completely accessible until the investors’ death might seem too good to be true.

So how does one achieve this acceptable tax haven status?

Well on Income tax consider that through a combination of any or all of the standard personal allowance; the personal savings allowance; nil rate starting band and dividend allowance an individual could look to receive up to £20,000pa tax-free income.

Meanwhile the Capital Gains tax exemption stands at £11,100 per annum available to every individual on a yearly use it or lose it basis. There are some rules to bear in mind but regular non-contentious use of the exemption can lead to fully realised investments being Capital Gains Tax free.

As mentioned above estate planning can be constrained by a number of regulations but the legitimate use of trusts can overcome these constraints.

Then there are Pensions; ISAs; Venture Capital Trusts (VCTs) Enterprise Investment Schemes (EIS) all highly tax efficient in their own way.

All the strategies & investments I have mentioned are specifically provided for and draw their tax efficiency from the legislation. They are not founded on exploiting loopholes just on the use of reliefs and exemptions intentionally legislated.

In putting together the right mix of tax reliefs, exemptions and efficiencies we as advisers can deliver our clients their very own Government approved tax haven.

To discuss any matters arising from this Briefing Note please contact Holborn Financial on 020 8946 8186 or by email.

This Briefing Note is provided for information purposes only and does not constitute any form of financial or investment advice. We believe the information to be correct at the time of going to press but we cannot accept any responsibility for any loss to any person as a result of action or refraining from action as a result of any item herein.

Printed and published by ©Holborn Financial Limited authorised & regulated by the Financial Conduct Authority. March 2017