Article by Phil Mason
As the 5th April tax year end deadline approaches, so does the ability to use up the valuable tax saving and investment opportunities before they are lost. Here are our 6 top tips to consider for this tax year before it’s too late:
1. Make use of your ISA allowance of £20,000 per person, meaning a couple can utilise £40,000* of tax free investments per year.
2. Make contributions of up to £4,260* per child into Junior ISAs.
3. Maximise contributions in to your pension by using up your annual allowance of £40,000*. Unused allowances for the previous three years can also be used up meaning £160,000* can be invested into a pension before the end of the tax year.
4. Use up your annual Capital Gains Tax (CGT) exemption by realising gains of £11,700* per person in this tax year, or £23,400* for a couple. Those with gains above the CGT allowance may want to consider taking gains over two tax years or the use of investments that allow tax reclaims such as EIS** and VCT**.
5. Use your Inheritance Tax (IHT) gifting exemption of £3,000* for this year. A record £5.2 billion in IHT was collected in the 2017/18 tax year, and the Office for Budget Responsibility forecasts that receipts will increase to £6.4 billion by 2022/23. Your financial adviser can help you to ensure that your wealth is passed on to your family rather than the taxman.
6. For business owners, divert your company’s pre-tax profits into a personal pension to reduce your company’s liability to Corporation Tax, Income Tax (including on dividends) and NICs.
If you would like to know more about and discuss any of the above points, please do not hesitate to contact us on 03300 585 377
*All figures provided in this article are correct at the time of writing (March 2019) and apply for the 2018/2019 tax year.
** Enterprise Investment Schemes (EIS) and Venture Capital Trusts (VCT) are generally considered to be high risk investments and should be discussed with a qualified financial adviser before considering.
The content of this article is for information purposes only and should not be considered as advice. Decisions should not be taken based solely on the content of the website and individual advice should be sought first. Regulations, levels and bases of taxation are subject to change and individual circumstances.