What is personal (and wealth) tax and what does a personal tax accountant do?

Personal tax is a tax incurred by an individual and includes income tax, capital gains tax, inheritance tax and tax on savings and investments. Their role is to ensure tax returns are filed correctly and compliantly and to achieve the client’s personal wealth goals

Personal tax accountants often work with high net worth individuals (HNWI) and help them to protect, maintain and enhance their private wealth in the most tax efficient and cost-effective way possible.

Depending on the jurisdiction, some elements of personal tax (such as bank deposits, shares, fixed assets and pension plans) can be separately referred to as wealth tax.

Key responsibilities

Responsibilities will vary, but examples include:

  • establishing personal tax status
  • personal tax computations
  • tax return completion and submission
  • managing income tax liabilities
  • capital gains tax
  • inheritance tax
  • trusts, estates and executorship
  • non-domiciliary tax issues
  • ensuring the maximum use of tax breaks
  • mitigating personal taxes
  • maximising investment returns
  • analysing tax efficiencies of other lifestyle investments
  • dealing with complexities that arise from the taxes in different jurisdictions.

Why are they important?

Within the legal framework there are a number of ways of saving an individual tax and detailed knowledge of the local tax legislation means that personal tax accountants are valuable in helping clients optimise tax reliefs and exemptions.

Skills needed for this role

As well as excellent knowledge of tax laws and regulations, personal tax accountants must have superior interpersonal and communication skills to deal with clients in the most effective manner.

Strategic Professional Options examinations linked to this role

Advanced Taxation

Career opportunities presented by this role

Accountants in these areas assist a variety of individuals and opportunities exist with a wide range of companies, from smaller, local organisations to large, global consulting firms.

Competencies

High level competencies required include:

  • Stakeholder relationship management

    A. Positively develops relationships with internal and external stakeholders.

    B. Communicates and gains commitment from internal and external stakeholder.

    C. Uses emerging technologies to collaborate and communicate effectively with stakeholders.

    D. Applies professional and ethical judgement when engaging with stakeholders.

    E. Aligns organisational strategic objectives with stakeholder needs and manages expectations.

  • Taxation

    A. Communicates knowledge of the operation and scope of the tax system, obligations of taxpayers, and the implications of non-compliance and advises on tax planning.

    B. Advises ethically on strategic tax plans and computes the tax liabilities of individuals.

    C. Advises ethically on strategic tax plans and computes the corporation tax liabilities of individual companies and groups of companies.

    D. Explains and computes the effects of value added tax (VAT) / goods and services tax (GST) and indirect tax on incorporated and unincorporated businesses and advises appropriately.