Finances should improve with global tax evasion crackdown

There are perfectly legitimate ways to reduce your tax burden and relieve finances.

10:32 21 June 2013

Tax evasion measures were one of the topics of the G8 summit and an agreement was reached to clamp down on those who avoid taxes. The new measures could mean a lot more revenue for many poorer countries, and those that are already doing fine economically.

In our own finances, there are perfectly legitimate ways to reduce the tax burden. Here are just a few ways to improve your finances legitimately.

• Independent Savings Accounts—these little gems allow you to stow away money and receive interest which is tax-free. Cash ISAs and Stocks and Shares ISAs play a little part in allowing you to grow your funds without penalties. In addition, if you reinvest that, or leave it in the account it helps you earn even more tax-free money.

 

• Inheritance tax—this is difficult on some families with tight finances and while the UK allows a sizable amount for an inheritance, if you are trying to prevent leaving a burden for your heirs then you’ll want to get rid of some property. The key is that if you do that you need to do it at least seven years before your death.

 

• Gifts—this helps finances in a couple of ways. Sizable gifts are allowed upon certain occasions. There are limitations to the amount which can be given at one time and to certain occasions for larger amounts. Giving gifts helps to reduce possible inheritance tax for your heirs, and allows you to help someone who may be in need of your assistance.

 

• Junior ISAs—these are gifts of another kind. If you have children or grandchildren you are allowed to contribute to a Junior Cash ISA or a Junior Stocks and Shares ISA which will also help you reduce the amount of your finances that are subject to inheritance tax, and earn tax-free money for your loved ones.