Tax Planning Checklist

Tax Planning Checklist Skill

Produces a structured tax planning review framework — identifying common reliefs, year-end planning opportunities, and potential gaps. Always recommend a qualified tax adviser for implementation.

WARNING: Tax law changes frequently and varies by jurisdiction. This checklist produces a framework for discussion, not tax advice. Always verify with a qualified accountant or tax adviser before taking action.

Required Inputs

Ask the user for these if not provided:

• Entity type (individual / sole trader / limited company / partnership / trust)
• Jurisdiction (UK / US / EU / Other — defaults to UK if unspecified)
• Approximate income or revenue (to identify relevant thresholds)
• Key concerns (optional — e.g. capital gains, pension, inheritance, R&D credits)
• Time horizon (year-end planning / ongoing / specific event like sale or exit)

Output Structure

Tax Planning Checklist — [Entity Type] — [Tax Year / Period]

Jurisdiction: [UK / US / Other] Entity type: [Individual / Limited company / etc.] Key thresholds to note: [List relevant tax-year thresholds — e.g. personal allowance, basic rate band, VAT threshold]

Section 1: Income and Allowances

• Personal allowance fully utilised? (UK: £12,570 — check if taper applies above £100k income)
• Dividend allowance used where relevant? (UK: £500 2024/25)
• Savings interest allowance reviewed?
• Salary/dividend split optimised for owner-managed companies?
• Any income timing opportunities before year-end?
• Spouse or partner allowances — any transfer or use opportunities?

Section 2: Pension and Retirement

• Annual pension allowance assessed? (UK: £60,000 or 100% of earnings, whichever lower)
• Carry forward of unused annual allowances from prior 3 years checked?
• Company pension contributions reviewed (corporation tax deductible)?
• Salary sacrifice arrangements in place or reviewed?
• Lifetime allowance implications assessed? (UK: abolished April 2024 — but transitional protections still relevant for some)

Section 3: Capital Gains Tax

• Annual CGT exempt amount used? (UK: £3,000 for 2024/25)
• Crystallising gains before year-end to use exemption?
• Loss harvesting opportunities reviewed?
• Business Asset Disposal Relief (BADR) eligibility checked for business sales?
• EIS / SEIS investments reviewed for CGT deferral?
• Bed-and-ISA / bed-and-SIPP opportunities assessed?

Section 4: Business Reliefs (UK Limited Companies)

• R&D tax credit eligibility reviewed? (SME scheme vs RDEC depending on size)
• Capital allowances claimed on qualifying expenditure?
• Annual Investment Allowance (AIA) utilised? (UK: £1m)
• Patent Box relief explored for IP-derived profits?
• Employment Allowance claimed?
• Entrepreneurs' Relief / BADR reviewed for shareholding structure?
• Loss reliefs utilised or carried forward optimally?

Section 5: VAT

• VAT registration threshold monitored? (UK: £90,000 rolling 12 months)
• Flat rate scheme vs standard accounting reviewed?
• Partial exemption position reviewed if relevant?
• VAT on property or mixed-use assets checked?

Section 6: Inheritance Tax and Estate Planning

• Annual gifting allowances used? (UK: £3,000 per person per year)
• Business property relief and agricultural property relief eligibility?
• Trust structures reviewed for IHT efficiency?
• Life insurance written in trust to prevent estate inclusion?
• Nil rate band and residence nil rate band utilised optimally?

Section 7: ISAs and Tax-Efficient Wrappers

• ISA allowance fully subscribed? (UK: £20,000 per person 2024/25)
• Junior ISAs for children considered?
• Venture Capital Trusts (VCT) or EIS investments considered for income tax relief?
• Lifetime ISA (LISA) reviewed for eligible individuals?

Year-End Action Summary

Based on the above, prioritise these before year-end:

Quality Checks

• Jurisdiction confirmed before applying any thresholds or rules
• Year-end deadlines identified for time-sensitive opportunities
• High-impact items prioritised (not just a long undifferentiated list)
• Disclaimer is prominent — this is a framework, not tax advice
• Threshold figures are flagged as requiring verification for current tax year

Anti-Patterns

• Do not provide specific tax advice — always recommend qualified tax advice and note this prominently
• Do not present threshold figures as definitive without noting they require verification for the current tax year
• Do not produce a generic checklist without tailoring it to the entity type (individual, sole trader, limited company)
• Do not omit timing-critical items — some reliefs require action before year-end and deadlines must be called out
• Do not conflate UK and non-UK tax rules — clarify jurisdiction before generating any checklist

Example Trigger Phrases

• "Give me a tax planning checklist for [year-end / my situation]"
• "What tax reliefs should I consider as a [sole trader / limited company / individual]?"
• "Review my tax efficiency before the end of the tax year"
• "What should I check for my year-end tax planning?"