Yes – there is just over a month to go technically, but don’t be fooled and let the end of the tax year sneak up on you. Here are some of the key questions to ask yourself before 5th April 2019.
Have you used your ISA allowances?
The ISA allowance currently stands at £20,000 per person and if you don’t use it, you lose it. Any interest or dividends paid or investment growth within an ISA is entirely tax-free so this is an extremely valuable allowance to use and is the starting point for many of our clients.
Have you contributed to a pension this year?
Your “annual allowance” dictates how much you can pay into a pension in a tax year whilst still benefiting from tax relief. This is one of the few allowances that can be carried forward from the previous 3 years, provided you had a pension that you could have theoretically paid into during those years.
For the majority of people, your annual allowance will be £40,000 meaning that you may have scope to contribute up to £160,000 whilst still benefiting from tax relief. Of course, if you are fortunate enough to be in a position where this is a possibility for you we would strongly suggest you seek advice before proceeding.
Making personal pension contributions is a great way to reduce your tax liability whilst also saving towards your future so it’s worth considering for the majority of people.
Have you used your Capital Gains Tax allowance?
This is a commonly overlooked allowance and not everyone has the assets in place to use it, but if you do have any investments or assets that you can sell before the end of the tax year, up to £11,700 of your gain made can be realised completely free of tax.
Have you made use of your annual gift allowances?
When it comes to Estate Planning slow and steady generally tends to win the race. Utilising your annual gifting allowance of £3,000 per person may not sound like a lot but if this is done every year it can soon add up to a significant inheritance tax saving.
You can also carry forward any of your unused allowance from the previous year so this means a married couple could be able to gift up to £12,000 in one year. Any amount gifted under these rules will immediately fall outside of your estate for inheritance tax purposes rather than having to wait 7 years, so getting into the habit of using this allowance each year is a great way to minimise the potential inheritance tax on your estate.
This is just the start of the tax year end planning that we consider for our clients and as ever we would recommend that you seek out advice before proceeding with any tax planning strategies as there can be many pitfalls that need to be considered carefully.
For more information please do get in touch with our team today.