Time has a habit of ticking away. You think you have plenty of time to deal with your financial affairs and, before you know it, it’s the end of the tax year.
So, if you want to make the most of opportunities to reduce your tax bill, you need to act before the 5 April deadline.
With just weeks to go, you may wish to check the following:
- If you leave at least 10 per cent of your net estate to charity a reduced rate of 36 per cent rather than 40 per cent applies. Gifts to a spouse can be made now to use up his or her nil-rate band and could help to reduce the value of your estate over the £325,000 band.
- 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 and if you own a company you can claim a business tax reduction. Be aware that new rules applying to high earners which came into force in April 2016, which saw the amount some people can save reduced in relation to the amount they earn.
- 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 £15,240 into your ISA? From 6 April 2017, the limit will be raised to £20,000.
- Junior ISAs or Child Trust Fund: Has £4,080 been invested for any child under the age of 18 in 2016/17? From 6 April 2017, the limit will be raised to £4,128.
- It will soon be possible to open a Lifetime ISA between the ages of 18 and 40. LISAs enable you to save up to £4,000 each year and receive a Government bonus of 25% on any savings deposited before your 50th Accounts are available from April 2017.
These are just a few examples of the many savings that can be made by prudent tax planning. For more information on any end of year tax planning issues, and opportunities to reduce your tax bill, please contact us.