Reducing tax bill by investing

A question about : Reducing tax bill by investing

Hi all,

I have been searching for answers to this but have not found anything so maybe someone here knows.

Lets say I have earned enough for a large tax bill this year. For the sake of argument, lets say that my tax bill is Ј20k.

Is it possible to purchase a buy-to-let property with the Ј20k I have put aside for tax as the deposit? In my mind it is a business expense as I will be letting the property out.

If not, are there any other large purchases that can be made to reduce a tax bill?

Thanks!

Best answers:

• You can pay it into a pension.
  However, if you reduce your taxable pay by Ј20k it wouldn't eliminate the tax bill. (Re-run the numbers with a reduced income by your tax bill to see why).
• Venture capital trust is very risky, as are any 'get rich quick' schemes, so be careful and do your homework. Also, rental property may not always be let, so allow for this if you go that way.
  Pensions are much safer, particularly if you select the areas in which the funds are invested.
  Sam