The recent autumn statement announcement included significant tax changes coming into force as soon as next April. Sarah Wakefield, Business Development Manager at Oxford Capital has put together the following useful summary to help advisers identify the changes and the opportunities for investors and how EIS may offer potential solutions.

The change:

The 45% tax rate from April 2023 will be applied to earnings over £125,140, a reduction down from £150,000, meaning more higher earners will be paying more income tax.

The opportunity:

Whilst many investors will probably begin by using pensions to reduce their income tax liability, the pension lifetime allowance freeze may result in many looking for alternatives to mitigate the liability. EIS offers investors the ability to reclaim 30% income tax relief for the tax year of investment and the ability to carry back the tax relief claim against the previous year’s income tax liability.

The change:

The proposed income tax personal allowance freeze until 2028 will push 3 million people into paying higher rates of income tax by 2026, according to analysis by the Institute for Fiscal Studies.

The opportunity:

Again, pension contributions may be the obvious option, but for those who have reached their lifetime allowance or annual allowance, EIS could offer an opportunity to reclaim some of the income tax liability whilst building capital over the longer term in a tax efficient way.

Click here to read the full article 



020 7071 3945


Throughout our site you will find links to external websites. Although we make every effort to ensure these links are accurate, up to date and relevant, we cannot take responsibility for pages maintained by external providers.