Awaiting the green shoots of spring? Use your time effectively

As we enter a new year, the winter months endure, but the hope of spring hangs in the air, an enticing prospect. So, while you’re awaiting the green shoots of spring, why not take the opportunity to get your finances in order before the end of the tax year? It’s a good time to double-check you’ve taken advantage of all the tax-efficient allowances available to you; remember we’re on hand to get you organised to avoid a last-minute rush.

Here’s a reminder of some of your main tax planning opportunities:

  • Pensions – current Annual Allowance of £40,000. For every £2 of adjusted income over £240,000, an individual’s Annual Allowance is reduced by £1 (the minimum Annual Allowance will be £4,000)
  • Pensions – The Lifetime Allowance places a limit on the amount you can hold across all your pension funds without having to pay extra tax when you withdraw money, the limit is currently £1,073,100
  • Individual Savings Accounts (ISAs) – maximum annual contribution of £20,000 per adult
  • Junior Individual Savings Allowances (JISAs) – maximum annual contribution of £9,000 per child
  • Making Inheritance Tax-free gifts – each financial year you can make gifts of up to £3,000 (in total, not per recipient) and if you don’t use this in one tax year, you can carry over any leftover allowance to the next year (some other exempted/ small gifts allowable). To reduce the amount of IHT payable, many families consider giving their assets away during their lifetime. These are called ‘potentially exempt transfers’. For these gifts not to be counted as part of your estate on your death, you must outlive the gift by 7 years. If you have enough income to maintain your usual standard of living, you can make gifts from your surplus income, advice is essential as strict criteria apply
  • Using Capital Gains Tax (CGT) allowances – £12,300 annual exemption per person, £6,150 for trusts – currently under review, correct at time of publication. 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.