The tax year end is fast approaching. So, what should we be thinking about before we’re quickly onto the next one?
It’s only a few months away and the year end on the 5th April will soon be here. It might feel at the moment as though there’s plenty of time until the beginning of April, but ensuring you make use of the remaining months before they disappear is always a good idea. Here are our top six tips for ways to make the most of this tax year whilst you can.
- Maximise your ISA contributions – Make the most of your Individual Savings Accounts allowance to invest your money. If you reach the end of the tax year without reaching the investment limit for your ISA, you cannot carry it over, so use it or lose it. The limit for the 2016/17 tax year is £15,240. From April, the new allowance will be increasing to £20,000 per person.
- Check your pension contributions – Reviewing how much you invest into your pension contributions at least once a year is a good idea. You can use pension contributions to help you manage tax liabilities, but high earners should keep the lifetime pension allowance in mind. The current allowance is £1 million, having been reduced from £1.25 million in April 2016, so anything over that amount in your pension is taxable.
- Carry forward of unused pension allowance – Don’t forget if you have maximised this year’s pension contribution allowance, if you have any unused relief for the 3 previous tax years, provided you have the funds, you can invest money against these tax years as well.
- Don’t forget your Capital Gains Tax Allowance – The Capital Gains Tax Allowance for the 2016/17 tax year is £11,100 per individual, which means that couples can pay no tax on up to £22,200 of capital gains. Genuine gifts from a civil partner or spouse do not count towards the allowance either, and there are other exemptions too, so it’s worth having a look at where you could make some tax savings.
- Boost your children’s retirement plans too – Whilst thinking about your own financial planning it can be easy to overlook the ways any offspring under the age of 18 can benefit too. Even though most children have no income, you can invest up to £3,600 gross into a pension for them.
- Use your annual gift allowance – You can make gifts of up to £3,000 each year without any IHT implications. If you didn’t use your £3,000 allowance last year, you can carry it forward so that the maximum available exemption is £6,000. However, if this is not used in the following year, it disappears altogether.
If you are thinking end of year tax planning, get in contact with us today. We may be able to help you.
If you or your family would like to talk us about your financial plans for future, please get in touch for a no-obligation meeting. Go to our website www.miadvice.co.uk and contact us via our “Get in touch” form on our home page or Contact Martin Dodd on 01902 742221.
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It is advisable to take advice from a professional financial adviser when making major financial decisions.
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This article has been prepared in good faith and based on Midlands Investment Agency’s understanding of the law and interpretation thereof at the time of creation. The contents should not be regarded as specific advice and we always recommend that specific advice is sort from a qualified professional. No responsibility can be accepted by Martin Dodd or Midlands Investment Agency Ltd., for any loss that may occur by a person acting or refraining from acting on the basis of this article.