Regardless of your age, personal situation or financial circumstances, you will have a range of different goals for yourself and for your family. These may include: raising young children and saving for their education; helping to care for and support ageing parents; achieving the standard of living you want for your household; and funding your retirement. As your accountants, we can help you to put in place strategies to help you achieve your objectives. We begin by looking at some of the useful strategies you could apply within the family.

Making the Most of Allowances and Exemptions Each member of your family is taxed as an individual, and so is entitled to his or her own allowances and exemptions. The basic personal allowance for 2012/13 is £8,105. Allowances and rate bands are allocated first to your earned income (which includes pensions), then to your savings income, and finally to any UK dividend income.

If your partner or children (who are aged atleast 13) earn less than £8,105 and help out in your business you can pay them a wage to reduce your taxable profits.

Saving for Your Children One of the most notable financial challenges facing children today is the amount of debt they will have incurred by the time they leave university. The introduction of higher tuition fees means that student debt is likely to rise significantly in the coming years, with the latest studies suggesting that a student starting university in 2012 will leave with debts in the region of £53,000-£60,000. If you’d like to know more about an option for university funding for your child, check out a new scheme called the Junior Individual Savings Account (ISA).

Every child has their own personal allowance, meaning that income up to £8,105 escapes tax, as long as it does not originate from parental gifts. If income from parental gifts exceeds £100 (gross), the parent is taxed on it unless the child has reached 18, or married. Thus parental gifts should perhaps be invested to produce tax-free income, or accumulate income, or in a cash or stocks and shares Junior Individial Savings Account. The £100 limit does not apply to gifts into CTFs, Junior ISAs or National Savings Children’s Bonus Bonds.

Generation Skipping Income from capital gifted by grandparents or more remote relatives will usually be taxed as the child’s, as will income distributions from a trust funded by such capital. Thus you can transfer income to the children from grandparents or remote relatives and utilise their tax free allowance in their personal allowance