Financial Planning Tips to act on before 5th April

With the end of the tax year looming (5th April), now is the perfect opportunity to make use of any tax or personal allowances that you have not yet used. But be quick, as many are “use it or lose it”.

By making use of allowances available to you, you can often save a significant amount of tax and therefore provide yourself with more money for both now and in the future.

Here are our top tax year-end tips for 2018/19

Individual Savings Accounts (ISAs) – fully utilise your tax-efficient ISA allowance. The allowance for 2018/19 is £20,000 per person, whilst the Junior ISA allowance is now £4,260 for children under 18.

Pension contributions – spouses and children – consider contributing up to £2,880 towards a pension for your non-earning spouse or children. The Government will add £720 on top – for free.

Pension contributions – maximise contributions and tax relief. Take full advantage of increasing pension contributions by utilising the annual allowance, which is £40,000 (tapered if you earn over £150,000) or the value of your whole earnings – whichever is lower. Unused annual allowances may also be carried forward from the previous three tax years so you could contribute up to £160,000 if your earnings allow.

Capital gains – use the capital gains annual exemption of £11,700 (2018/19) to realise gains tax-free. You can use the capital gains allowance against gains from investment property or investments & shares that are not in a tax wrap (for example, those in a share account or unit trust). The allowance cannot be transferred between spouses or carried forward.

Gifting – you can act at any time to help reduce a potential Inheritance Tax bill when you’re no longer around. Make use of the Inheritance Tax annual exemption that allows you to give away £3,000 worth of gifts outside of your
estate. If unused, the exemption can be carried forward one year.

Everybody’s situation and requirements are different when it comes to tax planning, so it is always best to seek financial advice to make sure you are using all allowances available to you and doing so correctly.

You can rely on True Financial Design to provide you with the expert advice you need to ensure you are making the most of the allowances available to you.

Lottie Kent

01423 297077 or  01937 338088

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