The end of the tax year means that your opportunities to take advantage of any remaining allowances in the 2017/2018 tax year are coming to a close.
1. Max out your Isa allowance
Not only should you take advantage of the £20,000 annual allowance, you should also move cash from other investments in to your ISA in order to future proof your savings, which may reduce the amount of tax you will have to pay in the future.
2. Top up your pension contributions
Pensions offer tax relief on contributions, making them another important part of your long term financial planning. Tax relief on up to £40,000 is on offer as long as the amount contributed is not more than 100% of earnings. Higher income earners (£150,000 plus) can't contribute the same amount however.
Utilising your carry forward allowance is another important tool. You can use your remaining annual allowance for the previous 3 years to contribute more than the £40,000 annual limit.
3. Pay into your spouse’s pension
You can contribute £2,880 per year in to your spouse's pension, even if they do not earn an income.
4. Use your marriage allowance
If you have earned less than £11,500 this tax year, and your partner's income is between £11,501 and £45,000 you can transfer £1,150 of your personal allowance to them.
5. Share assets with your spouse
By sharing assets with your spouse, you can attribute the maximum amount of capital gains tax (CGT) to each of your CGT allowances (currently £11,300) in the event of sale of the asset.
6. Remember your IHT allowances
Utilise gifting allowances in order to reduce the inheritance tax (IHT) that may be levied against your estate. You can give away up to £3,000 per year, plus the previous year's allowance if it has not been used.
7. Give money away
Making a donation to charity through gift aid is one way of reducing your tax bill as if you pay more than the basic rate of tax, you can claim the difference between the rate the charity claims back and your actual rate.
The next step is to plan out your year in order to set financial goals for yourself. Contact Westminster Wealth Management in order to convert your newfound financial responsibility in to a long term financial plan that could benefit you and your family well in to the future.
Information is based on our current understanding of taxation legislation and regulations which is subject to change.
The value of investments and income from them may go down as well as up and you may not get back the original amount invested.
A pension is a long-term investment. The fund value may fluctuate and can go down. Your eventual income may depend upon the size of the fund at retirement, future interest rates and tax legislation.
Seven year-end tax tips to minimise your bill