If you save into a cash ISA and/or a stocks and shares ISA, you can save up to £20,000 per tax year per person tax free. If you are married or in a civil partnership, then between you there is £40,000 that can be saved per year.
Increase your pension contributions
Be sure to check what your pension contributions are at least once per tax year, as increasing your contributions can be a great way to manage your tax liabilities. It is worth remembering the lifetime allowance is currently set at £1,055,000. Any contributions above this are then taxable. If you haven’t use of your £40,000 annual allowance now could be the perfect time to do this, you can also carry forward any unused allowances from the past 3 tax years.
The current threshold is set at £325,000 per person and can be combined to make £650,000 for married couples. Anything over this amount is taxed. Planning for inheritance tax can pay dividends in the future. This could be by making use of the annual gift allowance of £3,000 (£6,000 for married couples), creating or re-writing a will and putting assets into trusts.
Capital Gains Tax
When you sell something such as a second home or from a personal possession worth £6,000 or more, except selling your car, you have to pay Capital Gains Tax on this. For this tax year the allowance is £12,000 per person which won’t be taxed. Remember that gifts between spouses or civil partners doesn’t count towards the allowance.
Increase your children’s savings
The annual limit for the Junior ISA is £4,368, why not contribute more to reach this limit (if you have not done so already). Alternatively, if your children don’t have a Junior ISA it could be the perfect time to open one of these for them.
If you receive dividends by being a company shareholder/director or from a Stocks and Shares ISA, you can receive £2,000 tax free per year.
To read more of our tips to make the most of your current allowances, reliefs and exemptions then click this link.
Feel free to get in touch with us to discuss the best ways to prepare for the end of this tax year.
All details were correct at the time of writing.
Please talk to us to see if we can help you make the most of this tax year. Get in touch with us on 01609 760960. Or arrange a call back and one of our financial advisers will be happy to help.
Reference – BL092 – Feb – 20