The start of the new year also coincides with the tax payment deadline at the end of January. Some may have deferred their July payment on account, so might be hit with an increased bill this month.
Financial planning this year is more difficult than usual with the Covid-19 pandemic. In these uncertain times, it is more important than ever to make the most of the tax allowances and reliefs available to you in case they are not there in future.
Before the end of the tax year in April, you should consider the following key questions:
- Could you transfer savings or investments to your partner to minimise tax payable at the higher rates next tax year, to maximise use of the personal savings and dividend allowances, or to avoid losing your personal allowance or child benefit?
- Have you considered the timing of dividends and bonuses to minimise tax payable?
- Have you used your CGT annual exempt amount by making any available disposals before the tax year end?
- Are you investing enough in your pension (or possibly a lifetime ISA) if you wish to, or have to, retire earlier than state pension age, which is likely to keep going up?
- If you are aged over 55, have you taken advice about the options for drawing your pension savings?
- Have you used this year’s ISA allowance and made any other tax-efficient investments before 6 April 2021?
- Have you made gifts to use your annual IHT allowances?
The guide below provides you with an insight into the core opportunities you should consider. With ideas covering income and investment, couples, company directors and employees, there is something for everyone. We also provide some essential tips for those wanting to reduce their inheritance tax liability.
The guidance included here forms the base of a good financial plan. If you would like personalised advice on any of these topics, please get in touch.