Focus Your Planning - Tax Year End

With the run-up to the end of the tax year fast approaching, have you taken action to avoid missing out on the valuable tax-saving allowances and opportunities that would otherwise be lost?   Below is a ten point tax checklist on valuable relief and exemptions:
  1. Ensure you have made use of your ISA allowance of £15,240.
  2. Ensure your spouse or partner has maximised their ISA allowance to fully utilise the combined allowance of £30,480.
  3. Make contributions of up to £4,080 per child into a Junior ISA to help younger generations get a head start.
  4. Those wishing to maximise pension saving should ensure they have fully utilised their annual pension allowance.  Unused pension allowances can be carried forward, but only from the three previous tax years.  If your 2016/17 allowance is fully utilised, you should review whether you have any unused allowances from the 2013/14 tax year first.
  5. If you're thinking of making a large pension withdrawal, it could make sense to spread the withdrawal over two tax years to minimise your Income Tax liability.
  6. Take advantage of your annual Capital Gains Tax (CGT) exemption by taking gains of £11,100 in the tax year.  Those with larger liabilities might look to take gains over two years, and make use of tax-free inter-spouse transfers.
  7. High earners should take steps to bring their taxable income down by making pension contributions or charitable donations.  These can help individuals rate tax band, which starts at £150,000; to regain their Personal Allowance, which starts to be withdrawn from £100,000; and avoid losing Child Benefit, which is gradually removed if one parent in the household earns more than £50,000.
  8. Use your Inheritance Tax gifting exemption of £3,000 for this year, and carry forward last year's exemption if it hasn't been utilised.
  9. If you own your own business, consider taking a dividend income and a lower basic salary to reduce National Insurance contributions (NICs).  The first £5,000 of dividend income is tax-free.
  10. Divert your pre-tax profits into a personal pension to reduce your company's liability to Corporation Tax, Income Tax, including on dividends, and NICs. Contributions will need to be paid before your company’s financial year-end for the business to qualify for the deduction in that accounting period.  In many cases, the deadline will be 31st March, 2017.

You have until April 5th to act, so don't lose out!

Brought to you by Lynn Anderson Ltd, Founder Member & Principal Partner Practice of St. James's Place Wealth Management

An investment with St. James's Place will be directly linked to the funds you select and the value can therefore go down and well as up.  You may get back less than you invested.  An investment in a Stocks & Shares ISA will not provide the same security of capital associated with a Cash ISA.  The favourable tax treatment of ISAs may be subject to changes in legislation in the future.  The level and bases of taxation, and reliefs from taxation, can change at any time and are dependant on individual circumstances.