Use or Lose it!

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Use or Lose it !

Here’s your TAX YEAR-END CHECK-UP.

The 2020/21 tax year is coming to a close, and if appropriate to your particular situation there are some important tax planning issues and opportunities you may wish to consider. No matter what kind of taxpayer you are, you need to plan ahead.

Here are some key things you might need to action before the tax year end Personal reliefs:

Pensions annual allowance: Unless you are an additional rate taxpayer, or have already accessed pension benefits then you are entitled to make up to £40,000 of pension contributions per tax year. Have you fully utilised your tax-efficient contributions for this tax year or any unused allowances from the three previous tax years?

Stakeholder pensions: A stakeholder pension is available to any United Kingdom resident under the age of 75. Children can also make annual net contributions of £2,880 per year, making the gross amount £3,600 regardless of any earnings. It is also a very beneficial way of giving children or grandchildren a helping hand for the future. Is this an option you or a family member should be utilising?

Individual Savings Accounts (ISAs): An ISA allows you to save tax-efficiently into a cash savings or investment account. The proceeds are shielded from Income Tax, tax on dividends and Capital Gains Tax. Have you fully utilised the maximum £20,000 annual allowance?

Junior ISAs: This is a long-term tax-efficient savings account set up by a parent or guardian, specifically for the child’s future. Only the child can access the money, and only once they turn 18. Have you invested the maximum £9,000 allowance for your child or children? Lifetime ISAs (LISAs): You must be aged between 18 and 40 to open a Lifetime ISA. The Government will provide a 25% bonus on the money you invest, up to a maximum of £1,000 per year. You can save up to £4,000 a year, and can continue to pay into it until you reach age 50. Could you be taking advantage of this very tax-efficient savings option?

Capital Gains Tax (CGT): There are two different rates of CGT – one for property and one for other assets. If your assets are owned jointly with another person, you could use both of your allowances, which can effectively double the amount you can make before CGT is payable. If you are married or in a registered civil partnership, you are free to transfer assets to each other without any CGT being charged. Have you fully used your £12,300 annual exemption?

To find out more or to discuss your situation, please call us on  01732 746188 – we look forward to hearing from you.