With one month to go until April 5, now is the time to finalise your planning. There is still time to cut your tax bill and changes today can protect yourself from future bills.
Here are 7 tax tips for you to consider:
Maximise Your Isa Contribution
You can put up to £20,000 a year into an ISA and the future income and any capital gains will be tax-free. You can do the same for your spouse.
Consider A Lisa
If you are over 18 and under 40 there is just time to set up a Lifetime Isa. You can use a Lifetime Isa (LISA) to buy your first home or save for later life. You are allowed to save up to £4,000 of your Isa allowance each year until you are 50 and benefit from the 25pc Government contribution.
Put Cash Into Your Pension
Why not make a pension contribution to reduce your tax bill. This is more beneficial if you are a higher rate taxpayer and if you are losing some of your personal income tax allowance because you earn over £100,000, this can be particularly efficient because it may give you an effective saving of 60pc. Remember there are limits on annual contributions so take advice before you put the cash in.
Put Cash Into A Close Family Members Pension
You can contribute to a Sipp and claim basic-rate tax relief for up to £2,880 a year regardless of your earnings, with the fund claiming £720 from HM Revenue & Customs to give £3,600 gross benefit. This is useful for non-working spouses and children.
Consider A Gift To A Charity
Giving money to charity can give you a tax benefit as well as the benefits to the charity. There is no annual limit and if you are a higher-rate taxpayer the benefit is greater.
Sell Investments To Utilise Your CGT Annual Exemption
We all currently have a capital gains tax annual exemption of £12,300. If you have shares or unit trusts it may make sense to sell enough before the year-end to use up this exemption. If you have a larger gain you can transfer assets to your spouse to use their allowance as well. The tax rules prevent you from buying the same investment back straight away so again take advice before you act.
Consider An Investment In A VCT Or EIS
There are tax benefits with Venture Capital Trusts (VCTs) and the Enterprise Investment Schemes (EISs). However, this is largely down to these investments being higher risk so great care must be taken. If you are willing to take the risk these types of investment do have considerable tax advantages but always seek advice and consider you may not have time to properly assess the investment given there is only a month to go.
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