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Time is running out for year end tax planning

Time is fast running out for those looking to complete their tax planning for the 2010/2011 tax year. With only just over three weeks in which to review, plan, complete applications and transfer funds the clock is ticking for those wanting to maximise ISA allowances let alone take advantage of pension and other tax planning measures.

One such measure which is particularly appropriate for 50% tax payers is investing in Enterprise Zone Syndicates (EZS). After thirty years of success in funding deprived area developments such as Canary Wharf, the current EZS schemes close at the end of the current tax year. Whilst the Government has announced that it intends to create further enterprise zones exact details are unclear at present. In any event, the time for investing to take advantage of the current tax year is now.

Enterprise Zone Syndicate managers have reported a huge amount of interest in current schemes and applications are arriving daily. With investments allocated on a first come first served basis there is a chance that those delaying may find the investment opportunity has closed.

Investing in EZS is a tax efficient way of helping to regenerate deprived areas. A 50% tax payer investing £30,000 alongside a £70,000 limited recourse loan can find themselves cash positive to the tune of just under £20,000. This cash return is thanks to tax relief provided by way of capital allowances. Even a 40% tax payer can find themselves cash positive to the tune of just under £9,600 following an investment in an EZS scheme.

From a technical point of view these schemes are classified as syndicate arrangements rather than unregulated collective investment schemes. Newshams currently provide advice on two schemes, both of which are managed via an EZS market leader with a proven track record.

Given the level of interest in EZS schemes those wishing to explore including an EZS within their tax planning would be advised to contact us for initial discussions immediately.

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