Tax planning: How it can save you money – and your sanity!

It may seem like a chore but dealing with tax with the help of a financial adviser can help you take full advantage of allowances, save money, and avoid unexpected bills.


  • It may be low on your to-do list, but tax planning can not only improve your financial well-being, but save you money, too.
  • Experts in complex tax rules, Financial Advisers are the ideal help when dealing with tax planning.
  • Key life moments are often the prompt to seek advice, but regular conversation with an adviser helps to ensure your finances continue to be run in the most tax-efficient manner.

Possibly one of the most avoided jobs on anyone’s to-do list, talking to your financial adviser about your taxes is no-one’s favourite chore. But, in the long-term, considering taxes when doing your financial planning will help to improve your well-being and even make you financially better off.

Unlike household chores, which anyone can do, tax is one area where you’re best off getting professional help – the UK tax system is extremely complex, with more than 1,000 different rules and regulations, and applying them properly requires expert knowledge.

Tax advice will likely pay for itself quickly – once you’re made aware of all the allowances and reliefs you can take advantage of.

Unravelling the rules 

Don’t mistake tax allowances for tax loopholes – they’ve been put in place for you to make use of as you save and plan for your future, so there’s no need to feel guilty about using them. Tax planning is relevant to all your financial goals, whether it’s short- and medium-term savings, retirement savings with pensions, or estate planning to ensure you’re able to pass on as much as you can to your loved ones.

While it’s likely you know that putting your money into a cash or stocks and shares ISA means you won’t have to pay tax when you take it out at the other end, you may not be aware of the tax rules around pension saving. Alongside tax relief boosting your contributions, your money will also be sheltered from tax as it grows.

Taking your money out of pensions is where the rules become more complicated, with plenty of pitfalls since the introduction of the pension freedoms in 2015. Between getting stung by emergency tax and triggering the money-purchase annual allowance and reducing the amount you can pay into your pension if you make a withdrawal, it’s no surprise that so many get caught out.

A Wellesley Adviser can provide important help when you’re approaching retirement. Their expertise will be able to navigate the tax minefield and help you structure your retirement income to manage the amount of tax you pay – using your pensions, ISAs, and any other assets.

Getting older is also likely to trigger thoughts of how to pass on your wealth when you die. Like pensions, Inheritance Tax rules are complex, and your adviser will be able to go through all your options such as gifting allowances and the use of certain trusts.

Age is not the only trigger to tax planning, however; career progression and increases in earnings, or even bigger bonuses or share options, are all events that can make getting tax advice worthwhile. And if you own your own small business, you may particularly benefit from advice. What, for example, is the best way to extract value from your company? How can you pay yourself in the most tax-effective way?

If you’re self-employed, you may have an uneven income pattern that makes pension saving trickier – but when some months or years are better than others, you may be able to take advantage of carry-forward rules and give your pension a good boost.

Keep the conversation going

While there are certain life events or stages that may act as a prompt to seek tax advice for the first time, it’s important not to regard it as a one-off transaction. Instead, it should be the start of a conversation that you regularly engage in with your adviser to be sure you’re continuing to run your finances in the most tax-efficient way.

Everyone can benefit from tax planning, but the benefits will be different depending on the complexity of your needs or situation.

Planning your taxes efficiently helps you make sure you’re paying the right amount of tax and avoiding the pitfalls that see too many people pay far too much. Employing an expert instead of taking the DIY approach means you can be confident that you haven’t underpaid and don’t need to worry about an unexpected bill.

Any job ticked off your to-do list always provides great satisfaction, but the relief that comes with having sorted out your tax is especially good. Sensible tax planning not only saves you money and even grows your wealth in the long-term, but it also provides a priceless sense of well-being that comes with not having to worry about your finances. If you’d like to tick your taxes off your list, get in touch with a Wellesley Adviser today.

The value of an investment with Wellesley Wealth Advisory will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than the amount invested.

The levels and bases of taxation and reliefs from taxation can change at any time and are generally dependent on individual circumstances.

Trusts are not regulated by the Financial Conduct Authority.

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