TL;DR: High-net-worth people don’t “dodge” tax—they use the rules: wrap investments (ISAs/pensions), reclassify income (dividends/capital gains), own via companies, defer sales, offset gains with losses, gift tax-efficiently, and sometimes borrow against assets instead of selling. You can use many of the same tools.

⚠️ Tax evasion (hiding income) is illegal. The tools below are legal tax minimisation. Rules change—double-check with a qualified adviser before acting.

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1) Reduce taxable income with wrappers

Pension (workplace/SIPP)

• What it does: Contributions get income-tax relief (usually at your marginal rate); growth is tax-free; taxed only when drawn.
• Why it helps: £100 into a pension “costs” a higher-rate payer £60 after relief.
• Typical moves:

 - Salary sacrifice to cut income tax and NI.

 - Carry forward unused allowance from the prior 3 years (subject to earnings).

• Watch-outs: Annual allowance applies; money is locked until minimum pension age.

ISA (Cash/Stocks & Shares)

• What it does: All interest/dividends/gains tax-free.
• Why it helps: Turns taxable returns into zero-tax forever.
• Typical moves: Bed & ISA (sell-buy within the wrapper); fill the ISA before investing outside.

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2) Shift to lower-taxed income

Dividends from your own company

• What it does: Small salary (to qualify for NI/state pension credits) + dividends (taxed at dividend rates).
• Why it helps: Overall lower tax/NI than taking everything as PAYE salary (within rules, and mindful of IR35 if relevant).
• Watch-outs: Changing dividend & allowance rules; company admin; seek advice.

Capital gains instead of income

• What it does: Taking return as capital gain can be more efficient than interest or salary.
• Why it helps: Gains are taxed differently; you can use the CGT annual exemption and harvest losses.
• Typical moves: Time disposals across tax years; split ownership with a spouse/civil partner to double allowances.

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3) Defer, offset, and smooth

Loss harvesting & gain smoothing

• What it does: Realise losses to offset gains; spread disposals across multiple tax years.
• Why it helps: Lowers CGT and keeps you within lower bands.
• Pro tip: Keep clean records of base cost and disposal proceeds.

Business deductions & capital allowances

• What it does: Legitimate costs reduce company profits before corporation tax.
• Why it helps: Less profit → less tax.
• Examples: Home-office % apportionment, software, professional fees, travel (rules apply). Capital allowances (e.g., full expensing) can accelerate relief on qualifying kit.

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4) Use generous reliefs (advanced)

EIS/SEIS/VCT (high risk)

• What it does: Income-tax relief (30% EIS/VCT; 50% SEIS), CGT deferral/exemption in some cases, tax-free dividends (VCT).
• Why it helps: Big tax reliefs—but risk capital could be lost.
• Who it suits: High earners with capacity for risk and long holding periods.

Charitable giving (Gift Aid / Payroll Giving)

• What it does: Gifts increase basic-rate band; higher-rate payers reclaim extra relief.
• Why it helps: Support causes and cut your tax bill.
• Pro tip: Keep Gift Aid records; claim higher-rate relief via Self Assessment.
  

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5) Borrow instead of sell (asset-backed lending)

• What it does: Use investments/property as collateral to borrow cash instead of selling.
• Why it helps: Avoids a taxable disposal today; you still own the asset.
• Watch-outs: Interest cost, margin calls, lender availability; more common at higher wealth levels.

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6) Household optimisation

• Spousal/civil partner planning: Transfer assets to the lower-tax partner (no CGT between spouses) to use two ISAs, two CGT exemptions, two dividend allowances.
• Children’s JISAs: Shelter long-term savings for kids in a tax-free wrapper.
• Property ownership splits: Align rental income with the lower-tax partner (Form 17 where appropriate).

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7) Timing & band management

• Keep an eye on thresholds: Personal allowance taper, child benefit charge, HICBC, student loan, NI steps.
• Move levers: Pension contributions, charitable gifts, and gain timing to stay within the most efficient bands.

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Quick table: the big levers

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“Rich vs. Typical” (what changes)

• Typical earner: PAYE salary, unwrapped bank interest, little planning.
• Wealthy: More returns held inside ISAs/pensions/companies, more capital gains vs. income, active use of losses/reliefs, and timing.

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Copy-ready diagram (layout brief)

Use your brand colours (#47476c slate background, #ff6f61 coral accents, off-white text boxes). Tall Pinterest infographic (1000×2000).

Header:
“How the Wealthy Legally Pay Less Tax (UK)”
Subtitle: Use wrappers, reclassify income, and time gains—no evasion needed.

Tier 1 — Reduce Income (wrap it)

• ISA (tax-free forever)
• Pension / Salary Sacrifice (tax relief now)

Tier 2 — Reclassify Income

• Small Salary + Dividends (Ltd Co)
• Prefer Capital Gains over interest

Tier 3 — Defer & Offset

• Harvest Losses to offset gains
• Time disposals across tax years

Tier 4 — Reliefs & Giving

• Gift Aid (expand basic band)
• EIS/SEIS/VCT (30–50% relief; high risk)

Tier 5 — Advanced

• Borrow against assets, don’t sell

Footer bar:
“Rules change. Get advice. Start with: ISA → Pension → Timing → Dividends/CGT.”

(If you’d like, I can turn this brief into a polished infographic image in your colours.)

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What todo next:

• 'Payday Flow ' - how to distribute your money so all works smoothly

• Track your tax-efficient pots automatically → Free Savings Splitter (Google Sheets).”
• Need everything in one place? Complete Finance Tracker 

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FAQ 

Is this only for the very rich?
No—ISAs, pensions, Gift Aid, loss harvesting, and spousal allowance planning are accessible to most households.

Is borrowing against assets normal in the UK?
It’s more common for high-net-worth clients, but secured lending/portfolio lines exist. Consider interest cost and risk.

Is this tax advice?
Educational only. Confirm suitability with a qualified professional.