The short version: Tax efficiency means arranging your finances to legally pay the least tax possible. Using allowances, reliefs, ISAs, pensions, and structuring things sensibly.
What makes something tax efficient?
ISAs shelter savings and investments from tax completely. Pensions give you tax relief on contributions. Using your CGT allowance means gains up to that level are tax free. Salary sacrifice can reduce your NI bill. There are lots of options depending on your situation.
Is it the same as tax avoidance?
Tax efficiency using legitimate allowances and reliefs is fine. Aggressive tax avoidance schemes that exploit loopholes are different and can land you in trouble with HMRC. There’s a line between sensible planning and pushing things too far.
How do you become more tax efficient?
Understand what allowances you have and use them. Contribute to pensions if you can. Use ISAs for savings and investments. Time things sensibly around tax years. Get advice if your affairs are complex.
Want to be more tax efficient? Let’s look at your options together.
