A true harbinger of Spring, the tax year end is with us again, so don’t miss out!

The tax net is tightening as allowances are frozen or reduced. Make sure you make the most of what you are entitled to before the tax year ends on April 5^th.

Pensions

Can you afford to pay more into your pension so you can benefit from tax relief? Every contribution counts no matter how small. A pension fund grows tax free and any contributions you make into the plan also receive income tax relief at your highest marginal rate. You can only invest in a pension until the age of 75, so make the most of it if you can.

If you contribute to a SIPP or other pension then the allowance is a maximum of £40,000, subject to how much you have earnt this year, and you might be able to add a carry forward allowance from the previous three tax years.

Even if you aren’t paying income tax this year then you can still pay up to £2,880 into a pension and receive an additional £720 top up from HMRC.

Anyone can contribute to a Junior SIPP or other child pension where the annual allowance is also £2,880.

You can increase your State Pension by topping up any shortfall in National Insurance contributions over the last 6 years. More details are available at: https://www.gov.uk/voluntary-national-insurance-contributions

Investments

Once again you can contribute up to £20,000 into a cash or a stocks and shares ISA. You can’t take your ISA allowance with you into the new tax year, so this one is a no-brainer, use as much as you can or lose it and miss out on the tax-free benefits.

This year’s Junior ISA allowance is £9,000. You can open a Junior ISA for a child under the age of 18 if you’re the parent or guardian and then anyone can contribute. They work in exactly the same way as adult ISAs, except for the amount of the allowance.

Check investments held outside your ISA and pension. Did you know that the Capital Gains tax allowance will be reduced in the next tax year from £12,300 to £6,000 and then to £3,000 in the following year? Remember, you can sell your existing investments that aren’t tax protected to use the allowance and top up your tax efficient ISA and/or pension accounts with the proceeds.

Inheritance Tax

If you can afford to give money away, you can use these allowances to minimise an eventual inheritance tax charge:

£250 small gift allowance – you can give as many as you like as long as you have not used another allowance on the same person.

£3,000 tax-free gift allowance – you can give up to £3,000 in financial gifts every year. Your tax-free gift allowance can be split or given to one lucky recipient. You can carry your tax-free allowance forward for one year meaning you might be able to give away up to £6,000 this year.

The value of pensions and investments may fall as well as rise. You may get back less than you originally invested.

Tax treatment varies according to individual circumstances and is subject to change.