hello and welcome to our series of short videos covering various aspects of tax year end planning. In this particular video, we will consider when investments trigger the need to self assess. and is correct, as at the date you can see in the footer below. Directors. Those in partnerships and the self employed will be familiar with the self assessment process, but many employed individuals pay tax at source on their wages through the pay as you earn system, so don't need to self assess for their employment income. However, there are other reasons they may need to file a tax return. For example, they may receive rental income income from a trust or they or their partner receive child benefit, and either of them had an annual income of more than £50,000. Investments can also trigger the need to file a tax return, which is what I'll be considering in this video. In relation to insurance bonds and OEICs and unit trust investments, you can check whether someone needs to self assess. Using HMRCs is online tool, and on this slide is a screenshot of the homepage of the tool and includes the website address in this video, I'll go through questions 3, 4, 6 and 8 from this tool as investment income and gains are relevant to these questions, If the only source of income is taxed employment income of less than 50,000, then you don't need to self assess. However, if you invest in OEICs or unit trusts, they will generate interest or dividends, which need to be included in total income insurance bonds are non income producing. But when chargeable events are triggered, which may not be, every year the gain needs to be included in the total income calculation. If the income or gains from these investments means your total income is between 50,000 and 100,000, then you'll be asked if you or your partner are in receipt of child benefit and if either of you receive child benefit, then you'll be required to file a tax return due to the high income child benefit tax charge. For those with adjusted net income of between 50,000 and 60,000 the charge will be 1% of the total benefit for every £100 of income over £50,000. The charge applies to the partner with the highest adjusted net income, regardless of who actually receives the child benefit. If total income is over £100,000 then you also need to self assess. This is because the personal allowance is gradually withdrawn for individuals with adjusted net income above 100,000 by £1 for every £2 over the £100,000 limit, depending on their circumstances. These individuals may also be subject to the high income child benefit tax charge as well, which triggers self assessment as previously mentioned, a couple of key points to remember with regards to total income. This will include interest and dividend income from OEIC and unit trusts. Even when accumulation shares or units are purchased. For chargeable event bond gains, it's a full bond game that's included for total income purposes, not the top sliced gain. Another trigger for self assessment is when you receive more than £10,000 in savings and investment income, or £10,000 from dividends. This will be the case even if there's no tax to pay. For example, if you have no other sources of income other than £12,000 of dividends, then there will be no tax to pay. But you would still be required to self assess. Another example would be an onshore bond gain over £10,000 but there's no tax to pay. As a full gain sits in the basic rate band, however, there would still be a requirement to self-assess A few key points to remember. Again, it's a full bond game that needs to be taken into account, not the top sliced gain self assessment is required if the £10,000 threshold is breached, even if the tax is payable. And it should be noted that if you have untaxed income below the £10,000 threshold, you must tell HMRC if its dividends of more than 2000 or for any other untaxed incomes such as commission, rental income or even offshore bond gains of between 1000 and 2,500 you must tell HMRC. However, you don't need to self assess for this untaxed income. Instead, you can call HMRC or update them online, using the personal tax account service. And finally, for those who invest in OEIC and Unit Trust investments, when they sell shares or units, the disposal might trigger a need to self assess. A gain made under an insurance bond, is not subject to capital gains tax unless it has at an earlier time being acquired by any person for actual consideration. Capital gains tax on insurance bonds is not a common scenario, but this should be kept in mind. A few key points. If you're not previously registered for self assessment, then you will need to self assess if your total capital gains and more than the annual exempt amount. You also need to remember there's a CGT proceeds reporting limit. If the proceeds exceed the reporting limit, you need to self assess, even if the gain is less than annual exempt amount. The reporting limit for the 2022-23 tax year is four times the current annual exempt amount i.e. £49,200. However, it should be noted that with effect from the 2023-24 tax year, the reporting limit is being fixed at £50,000. And finally, you need to remember to report unused losses as they could be carried forward and set against gains in future tax years. A loss will not be allowable unless quantified, which can be done via self assessment. If there's no need to self-assess, this can be done in writing to HMRC. In his 2022 autumn statement, the chancellor made a couple of announcements which impact personal financial planning. The dividend allowance will be cut from £2000 to £1000 from the 6th of April 2023 then to £500 from the 6th of April 2024. It was also announced the annual exempt amount for capital gains tax will be cut from £12,300 to £6000 on the 6th of April 2023 then down to £3,000 from the 6th of April 2024. These changes are likely to mean more people will be subject to tax on their income from investments and gains from investments. And therefore I need to self-assess. If you prefer to avoid doing a tax return next tax year, then there are some planning considerations. If you're holding an OEIC or a unit trust portfolio and they're investing for growth, then consider switching off the income tap and instead holding the same investment fund of funds and an ISA wrapper or non-income producing investment bond as this would reduce the taxable income that needs reporting. If access is not required until retirement, then holding the investment within a pension would also reduce the taxable income that needs reporting The child benefit or personal allowance. tax traps can trigger the need to self-assess because investment income or bond gains has increased the adjusted net income to above the 50,000 or £100,000 threshold respectively. In such a case, then making a pension contribution can reduce adjusted net income below these thresholds. And finally, another consideration is to transfer investments into the spouse or civil partners name if this means that income or gains will keep both parties under the relevant thresholds, as well as making any use of unused allowances available where appropriate. This is us at the end of the short planning video, which we hope you've found helpful. If you have any questions, please get in touch with your usual contact. Thank you