As the new year kicks off, there are still a few months remaining before the end of the tax year on 5 April 2025.
This means you’ve got a valuable window to make the most of the tax reliefs and allowances available to you and your business.
With a little thoughtful planning now, you could set yourself up for some significant savings and start the new year on the right foot.
Here are just a few of the effective ways to minimise your personal tax liabilities:
Maximise allowances and reliefs – Act now to take full advantage of available allowances and reliefs before thresholds change, ensuring you make the most of current opportunities.
Prepare for rising payroll costs – Get ahead of increased labour expenses and changes to Benefit-in-Kind (BIK) reporting by reviewing your payroll strategies.
Review your shareholding – Strategically assess the ownership of shares to optimise your tax position and plan for future changes.
Investments – Explore options such as ISAs, Enterprise Investment Schemes (EIS), and Seed Enterprise Investment Schemes (SEIS) to reduce your tax liabilities while diversifying your investment portfolio.
Plan for Inheritance Tax (IHT) – Begin planning early for upcoming IHT adjustments, especially with pension funds soon falling within the scope of IHT and reforms to Business and Agricultural Property Relief. Proactive planning, including exploring trust structures tailored to your needs can help protect family wealth and mitigate future tax liabilities.
Tax-efficient asset disposals – With immediate changes to Capital Gains Tax (CGT) rates and a four per cent rise in the Business Asset Disposal Relief (BADR) rate from 6 April 2025, followed by an additional four per cent increase the next year, careful planning of share or asset sales is essential.There’s still time to benefit from the lower BADR rate. Seeking expert guidance now can help you minimise tax implications before the threshold changes take effect.
Salary versus benefits – Consider exchanging a portion of your salary for contributions to an approved share scheme or increased pension payments to lower your tax liabilities.
Everyone’s tax planning approach is unique, tailored to their income, assets, and aspirations.
So, before you make any big decisions, take a moment to review your finances and align your tax planning with your long-term goals.
As you prepare your plans for 2025 and beyond, consider that a tax strategy meeting with our team of specialists could be one of the best decisions you make this year.
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