About tax planning

Everyone has to pay tax at some time but if you’re not careful you could end up paying more than you need. There are various reliefs, allowances and tax efficient savings you can use to make the most of your retirement savings – and your retirement income.

Tax planning when you’re saving for retirement

If you’re a higher rate taxpayer, you have to reclaim any higher rate tax relief on your pension contributions through your annual tax return. It’s surprising just how many people fail to do this, or claim too little.

With our tax planning service, we’ll help you maximise this relief.

Tax planning in retirement

Tax planning doesn’t stop just because you’ve retired, and it doesn’t necessarily become simpler.

If you receive retirement income from various sources – such as a company pension scheme, the state pension and your own investments – working out your tax liability can be complicated.

And if you dispose of any assets, that could result in a capital gains tax liability. As you get older, you’re entitled to a higher personal allowance. Are you claiming yours?

Pension plans are probably the most tax efficient way of saving for your retirement.

With pensions, you get tax relief on your contributions at the highest rate of income tax you pay. But obtaining this higher rate relief isn’t automatic. You have to claim it. If you don’t, you could lose out on a large chunk of tax relief.

Here’s how it works:

• When you make a pension contribution, your pension company reclaims an amount equal to 20% (the basic rate of tax) of your contribution from HM Revenue & Customs (HMRC)
• So when you pay £80 into your pension, it’s boosted by a further £20 from the taxman
• If you are a higher rate tax payer it’s up to you to reclaim a further 20%– the difference between higher and basic rate tax – using your tax return. If you don’t do this, you could be throwing money away

Our Personal Tax Service can help

With the NatWest Personal Tax Service we’ll make sure you claim all the tax reliefs you’re entitled to, and more. Find out how it can work for you.

• More on Personal Tax Service

Here are some ways to get the most out of your tax allowances and tax reliefs.

• Start a pension - you’ll get tax relief on your contributions, tax-efficient fund grow and you can take part of your fund as tax free cash.
• Use your ISA allowance - you can invest up to £10,200 in tax-efficient ISA.
• Offshore bonds - your funds will grow tax-free, but you’ll have to pay tax when you cash them in
• Your tax status - if you have a spouse or civil partner who pays less tax than you, or no tax at all, you could save tax by transferring assets to them. You would, of course, lose ownership of the assets by doing this