Time is ticking away to the end of the tax year on 5 April, so if you want to make the most of opportunities to reduce your tax bill, you need to act now.
With just weeks to go, some key questions to ask yourself include…
- Is your taxable income between £100,000 and £150,000? If so, you can make significant tax savings by reducing your income level, for example through pension contributions or a Gift Aid donation to charity. If you bring your income below £100,000 you will protect your personal allowance while taking it below £150,000 removes you from the 45 per cent tax rate.
- If your income exceeds your personal allowance, could you save tax by passing some on to your partner, if it were to fall within their personal allowance?
- Could you top up your pension contributions? Tax relief is available on annual pension contributions of up to £40,000 in 2014-15, so it makes sense to take full advantage of this, particularly as there could be significant changes to the pension tax relief regime following the general election in May.
- Have you made use of your annual inheritance tax (IHT) exemptions? The general annual exemption is £3,000 (plus last year’s £3,000 exemption if you did not use it).
- Have you paid the maximum of £15,000 into your ISA?
For more information on any end of year tax planning issues, and opportunities to reduce your tax bill, please contact us.