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Money Confidence – Tax
On this episode of the Money Confidence podcast, Sarah and Georgia talk about tax.… don't switch off! They make it interesting… or, as interesting as it can be!
KEY TAKEAWAYS
There are many kinds of taxes. Most people know about Income Tax – the tax on your wages. The Personal Allowance is how much income you can receive that is tax free – this tax year (2022/23) it's £12,570, although this can change depending on disabilities or how much you earn.
If your adjusted net income is £125,140 or more, your Personal Allowance is zero. In order to bring your adjusted net income below £125,140 you could make a pension contribution. The effective rate of tax relief is 60%. You could also make a Gift Aid donation and if you're an employee then you may be able to give up some of your taxable earnings for non-cash employee benefits of equivalent value.
Capital Gains Tax is paid on investments outside of a tax efficient wrapper such as a General Investment Account. If your investments grow by £50,000 and you sell all those investments, that £50,000 gain is chargeable to Capital Gains Tax. However, you have a Capital Gains Tax Allowance which is currently £12,300 (in the 2022/23 tax year) and you don't pay tax on this amount.
Inheritance Tax is a tax paid on death. The current Inheritance Tax rate on death is 40% above your nil rate band.
BEST MOMENTS
‘If your adjusted net income is £125,140 or more, your Personal Allowance is zero.'
‘If you pay into your pension via Salary Sacrifice (it comes out of your gross income, before tax), you also save on National Insurance. Your employer will also be saving on National Insurance contributions.'
‘If you're claiming Child Benefit and not working you get National Insurance credits towards your State Pension. Claiming Child Benefit until your youngest child is 12 will give you National Insurance credits which count towards your State Pension.'
ABOUT THE HOSTS
Sarah is a Chartered Financial Adviser and Certified Financial Coach and Georgia is a Senior Paraplanner. Together, they have over 20 years experience in financial services and are on a mission to educate others about money in a fun and non-jargon way. They will help you master your finances and money mindset so that you feel more confident with money and the decisions you make around money. They talk all things money from investments, pensions and benefits to your mindset around money and steps you can take to improve your relationship with money. They aim to make it fun, educational and are with you every step of the way. Together, you've got this!
The information given in this podcast is for your entertainment and should not be construed as financial advice. No liability can be accepted for any individuals relying on this information without seeking specific advice and guidance. As always, take independent financial advice before making any investment decisions. Our discussions are based on tax and legislation in England which may change.
CONTACT METHOD
W: https://www.thegoodmoneycoach.com
IG: https://www.instagram.com/sarah_talks_money/
LI: https://www.linkedin.com/in/sarah-blyth-chartered-financial-planner-and-coach/
Hosted on Acast. See acast.com/privacy for more information.
View all episodes
By Sarah Blyth and Georgia LeggOn this episode of the Money Confidence podcast, Sarah and Georgia talk about tax.… don't switch off! They make it interesting… or, as interesting as it can be!
KEY TAKEAWAYS
There are many kinds of taxes. Most people know about Income Tax – the tax on your wages. The Personal Allowance is how much income you can receive that is tax free – this tax year (2022/23) it's £12,570, although this can change depending on disabilities or how much you earn.
If your adjusted net income is £125,140 or more, your Personal Allowance is zero. In order to bring your adjusted net income below £125,140 you could make a pension contribution. The effective rate of tax relief is 60%. You could also make a Gift Aid donation and if you're an employee then you may be able to give up some of your taxable earnings for non-cash employee benefits of equivalent value.
Capital Gains Tax is paid on investments outside of a tax efficient wrapper such as a General Investment Account. If your investments grow by £50,000 and you sell all those investments, that £50,000 gain is chargeable to Capital Gains Tax. However, you have a Capital Gains Tax Allowance which is currently £12,300 (in the 2022/23 tax year) and you don't pay tax on this amount.
Inheritance Tax is a tax paid on death. The current Inheritance Tax rate on death is 40% above your nil rate band.
BEST MOMENTS
‘If your adjusted net income is £125,140 or more, your Personal Allowance is zero.'
‘If you pay into your pension via Salary Sacrifice (it comes out of your gross income, before tax), you also save on National Insurance. Your employer will also be saving on National Insurance contributions.'
‘If you're claiming Child Benefit and not working you get National Insurance credits towards your State Pension. Claiming Child Benefit until your youngest child is 12 will give you National Insurance credits which count towards your State Pension.'
ABOUT THE HOSTS
Sarah is a Chartered Financial Adviser and Certified Financial Coach and Georgia is a Senior Paraplanner. Together, they have over 20 years experience in financial services and are on a mission to educate others about money in a fun and non-jargon way. They will help you master your finances and money mindset so that you feel more confident with money and the decisions you make around money. They talk all things money from investments, pensions and benefits to your mindset around money and steps you can take to improve your relationship with money. They aim to make it fun, educational and are with you every step of the way. Together, you've got this!
The information given in this podcast is for your entertainment and should not be construed as financial advice. No liability can be accepted for any individuals relying on this information without seeking specific advice and guidance. As always, take independent financial advice before making any investment decisions. Our discussions are based on tax and legislation in England which may change.
CONTACT METHOD
W: https://www.thegoodmoneycoach.com
IG: https://www.instagram.com/sarah_talks_money/
LI: https://www.linkedin.com/in/sarah-blyth-chartered-financial-planner-and-coach/
Hosted on Acast. See acast.com/privacy for more information.