Pre April 2020 year-end tax planning tips
The tax year end is nearly here – 5th April. Now is the time to review your financial and tax position to make the most of the legitimate year-end tax planning opportunities.
Year-End Tax Planning Tips
Here are a few things for you to factor into your plans:
Have you made the most of your ISA (Individual Savings Account) Allowance? The limit for 2019/2020 remains at £20,000. This gives you tax free growth on your savings. The Junior Isa allowance currently stands at £4,368, up from £4,260 in 2018/2019.
Capital Gains Tax
Have you taken advantage of your Capital Gains tax allowance? It has increased from £11,700 to £12,000 – £6,000 for trusts. This is the amount you can make tax-free on the sales of assets. You may decide to sell an asset before the 5th April date if you haven’t used this allowance or defer the sale if you have. Also consider crystallising and using capital losses to offset gains if you have made gains over your allowance in the year.
Consider tax efficient investments such as EIS (Enterprise Investment Scheme), SEIS (SEED Enterprise Investment Scheme) or VCT (Venture Capital Trusts) which can offer income tax reductions and with EIS and SEIS, capital gains tax deferrals.
Don’t forget to invest in your pension, there are tax breaks for pension payments, the end of the tax year is a good time to review this. For those with incomes over £120,000 – pension rule changes could have a significant impact on the contributions you can make – and you should speak to your tax or financial adviser.
Charitable donations, made under Gift Aid, also afford tax relief to higher rate taxpayers, and the charity gets a little extra too.
Have you taken advantage of your annual gift allowance for Inheritance Tax? You can give away up to £3,000 per tax year with no charge to IHT (Inheritance Tax). You can top this up to £6,000 if you didn’t use the allowance in the previous tax year.
If you own a business, there are different ways of getting the money out and maybe paying less in personal taxes and national insurance. It is a good idea to review this with your accountant regularly as the rules change all the time to ensure you are doing this in the most tax efficient manner possible.
Make a Will
Have you made a will? If not, you should and review the assets you hold – this can help with inheritance tax, capital gains tax and even income tax each year.
Talk to Cardens
There is still time to take action and if you want any help or advice on any of the above points, just give us a call on 01273 739592 or drop us an email on email@example.com and we would be delighted to help you.