- Financial planning
- 3 minute read
To help you make the most of them, we have put together a handy checklist of items to consider before the deadline. If you’d like to discuss your financial planning in more detail, get in touch with our financial advisers.
Use it or lose it: make the most of your ISA
The ISA allowance allows you to save or invest up to £20,000 a year tax-free, but the flexibility of ISA rules lets your money go further. If you have a spouse who you share your finances with, consider making use of both of your allowances for a joint limit of £40,000. Younger savers between 16 and 17 years old can also save £9,000 through a Junior ISA.
Revitalise your retirement fund: boosting your pension pot
The annual pension allowance is limited at £40,000, but this can be carried forward for up to three years. If you earn over £100,000 and are subject to the tapering of your tax free personal allowance you could increase your pension contributions which will reduce your taxable earnings, resulting in the claw back of some of your tax-free Personal Allowance. Giving you the double result of saving you tax while investing in your future.
Charity sweet charity: giving, and getting back, from charitable donations
Donations to charity from individuals are tax free. This is the case whether donating through Gift Aid or through Payroll Giving. For higher rate taxpayers, it’s possible to claim back the difference between the tax on your donation and what the charity receives. By adding Gift Aid to your kindness – charities can claim 25p per £1 donated back from the government – making your generosity go further.
The gift that keeps on giving: limiting your inheritance tax
Each tax year you can give away up to £3,000 worth of money or possessions as gifts so that they’re no longer included in the value of your estate- helping reduce a potential inheritance tax (IHT) bill. This allowance is per person not per household, and can also be carried forward a year, so if you didn’t take advantage of this last year there’s £6,000 worth of gifts to be given before April 5th.
You win some, you lose some: be smart with your investment win
There’s a Capital Gains Tax allowance of £12,300 per annum, so be smart with your investment successes. For basic rate taxpayers, there’s a 10% tax charge for gains above this allowance, which raises to 20% for higher rate taxpayers. If you’re considering selling assets, consider spreading gains over a number of years to minimise your tax exposure. It’s also worth keeping an eye on your dividends – the dividend allowance was cut last April to £2000 a year. If investments are generating income above this level you should consider Bed & ISA–ing your assets which would shelter them from future Income Tax and Capital Gains Tax.
Download our tax year end checklist and watch our basics of investing video.
It is important to note that no investment strategy is without risks; the value of investments can fall as well as rise and you could get back less than you invest.
In addition, tax benefits depend on individual circumstances and tax rules can, and do, change.
Important Information.
The information contained in this document is believed to be correct but cannot be guaranteed. Past performance is not a reliable indicator of future results. The value of investments and the income from them may fall as well as rise and is not guaranteed. An investor may not get back the original amount invested. Opinions constitute our judgment as at the date shown and are subject to change without notice. This document is not intended as an offer or solicitation to buy or sell securities, nor does it constitute a personal recommendation. Where links to third party websites are provided, Close Brothers Asset Management accepts no responsibility for the content of such websites nor the services, products or items offered through such websites.