Have you reviewed your finances before the end of the tax year?

Lamont Pridmore - Accountants

There are big savings to be made

Now is the time to review your investment and pension plans to make sure you are making the most of the opportunities on offer.

As we approach the end of the tax year on 5 April 2020, savers must take full advantage of the allowances and reliefs on offer.

A wide range of tax-free allowances are available, including the £2,000 dividend allowance, the £12,000 capital gains tax annual exemption, £40,000 annual pension limit and the £20,000 ISA savings allowance.

The full list of reliefs and allowances is dauntingly huge and optimising the use of these allowances is fraught with complexity and opportunities to make errors. 

Depending on an individual’s circumstances, it can be worth either bringing forward or deferring dividend payments from a company to make the best use of the dividend allowance this year and next year.

Similarly, deciding which tax year in which to dispose of an asset that is subject to capital gains tax can make a big difference to the overall tax rate.

There is also a wide range of allowances relating to pensions and savings that can further optimise a person’s tax position, as well as specialist reliefs for married couples.

In particular, individuals can save up to £40,000 a year towards their pension tax-free, but many fail to realise that unused allowances in previous years can be carried forward so that more can be saved in a single year.

Now is the ideal time to start planning your tax affairs before the end of the tax year on 5 April. An obvious tax planning point for most individuals would be to maximise their ISA allowances for the 2018/19 tax year, which currently sits at £20,000 per person.

There is a myriad of reliefs available to taxpayers to help maximise their income each year and with a Budget just around the corner, the Government is likely to announce several changes that could make certain forms of saving more lucrative.

That is why it makes sense to seek out professional guidance before the end of the tax year and have your finances reviewed.  For more advice please contact us.

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