Financial planning will take account of (a) your current income and assets; (b) your outgoings and liabilities; (c) the plans you have in place to both fund your life goals and to protect your assets.
Financial planning is an essential part of life and should be carried out annually or where there are changing circumstances both personally and where there is major economic change.
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Careful consideration needs to be given to your life plans and the tax implications.
Many people plan to leave assets like property and cash to loved ones by Will or by gift. By doing so, a taxable event occurs by way of inheritance tax or gift tax.
These taxes are known as Capital Acquisition Tax (CAT)
> You can plan for inheritance tax by using a 'Qualifying Insurance Policy' under Section 72
> Gift tax can be funded by using a 'Qualifying Insurance Policy' under Section 73
Certain tax exemptions apply and these depend on circumstances such as relationship and the type of asset being passed on, e.g. a farm or business
There is also a 'small gift exemption' and this applies to most people. The small gift exemption allows you to gift an amount up to €3,000 per year to any individual. This amount is not considered for tax assessment.
After any exemptions that apply, the remaining value of any inheritance or gift falls in to one of three categories or groups. These categories have CAT thresholds. This allows assets with values up to the thresholds to be taken tax-free.
The current thresholds are: Group (A) €335,000; (B) €32,500 and (C) €16,250. The value of all assets above these thresholds is taxable within the relevant group. The relationship between the person passing on the asset and the person receiving the asset determines the group/catergory for CAT.
The value of assets is aggregate, so anything received in your lifetime is used against the relevant threshold.
Group A is broadly parent to child and, child to parent for inheritances with an absolute interest.
Group B is broadly lineal relatives (other than cousin) and, child to parent for gifts or limited interest inheritance.
Group C is all other persons.
Learn More about CAT Planning.........
Tax and Pensions:
While you are earning an income and paying tax it is prudent to both fund for retirement and receive tax benefits.
It is important to note that where you draw an income from your retirement fund then this is assessed for tax.
see .... Pensions and Retirement or contact me for more information
BUSINESS FINANCIAL PLANNING
The main threat to your business is the loss of a Key Person through, Retirement, Illness or Death.
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Warning: If you invest in these products, you may lose some or all of the money you invest
Warning: The value of your investment may go down as well as up
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Warning: Returns quoted are for example and are not guaranteed. They are not a reliable guide to future performance