Are you making best use of tax efficient investment vehicles?
In everyday life the government seem intent on taking as much tax as possible with many taxpayers questioning what they actually receive in return. However, there are a number of long-term tax efficient savings vehicles which many people seem to ignore at their peril and their long-term cost. But why would a government incentivise the UK public to save for their future?
In simple terms the government would rather that each and every member of the UK public was able to pay into their own pension scheme and other tax efficient investment vehicles so that they can "look after themselves" in the future. While the state pension has risen below the level of inflation for some time, the ongoing liabilities of the UK government are increasing year on year as the UK population grows and life expectancy is extended.
While many of these tax efficient vehicles such as ISAs and various pension arrangements will exclude you from taxes such as capital gains tax, many people forget that a number of arrangements will also repay your tax on contributions. This is especially useful for higher rate taxpayers who could receive a substantial payment from the government on top of their "net contributions" to the various tax efficient investment vehicles. However, this is where it starts to get tricky as the government has a habit of changing the regulations and the figures in question on a regular basis!
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