(it touches every single decision)
Income tax, capital gains tax, inheritance tax, dividend tax, VAT on advice fees. Tax isn’t a separate service — it runs through every decision in this plan.
Tax isn’t something we bolt on at the end.
Every decision we’ve covered in steps one through six has tax implications. Where you hold assets, how you draw income, when you crystallise gains, how you structure protection — all of it has a tax dimension. If your adviser doesn’t understand your full tax position, they’re advising blind.
The difference between 20% and 45% is not a rounding error.
How you structure your income — salary, dividends, pension drawdown, rental income — determines how much of it you keep. For higher and additional rate taxpayers, the marginal rate including the personal allowance taper can exceed 60%. Planning around this isn’t aggressive tax avoidance. It’s common sense.
Timing matters. So does location.
Capital gains tax applies when you sell — but it doesn’t apply inside a pension or ISA. When you do need to sell in a GIA, the timing, the annual exemption, and the ability to offset losses all matter. We plan disposals. We don’t just execute them.
Inheritance tax is the most avoidable tax — if you plan early enough.
At 40% on estates above the nil-rate band, IHT is punitive. But it’s also highly plannable — through gifting, trusts, business property relief, pensions (for now), and life cover written in trust. This connects directly to Step 3 (Protection) and Step 8 (Trusts).
Where your dividends sit determines what you pay.
Dividends in a GIA are taxed at your marginal rate above the allowance. In an ISA, they’re tax-free. In a pension, they’re tax-free. Same holding, three different outcomes. This is why where you invest matters more than what you invest in.
How your adviser charges affects what you pay in VAT.
Investment management fees attract VAT. Financial planning advice typically doesn’t — because it’s intermediary activity. By delivering both together, we can structure fees to minimise the VAT burden. It’s not a loophole. It’s how the legislation works.
How this fits into your wider plan
Tax runs through every single aspect. It’s step seven because it connects to everything above — and informs everything below.
Tax is step seven because it touches everything.
Get the structure right and the tax takes care of itself.
