The new Financial Year may still be a little while off but that doesn’t mean you should put off thinking about your Tax Planning. There are several areas of your finances that may help you minimise the amount of tax you have to pay in the next financial year if you start thinking about it right now.
Here are some general things to think about before 2020 that are sometimes overlooked in favour of more complex arrangements. I f you think any of these could be beneficial please get in touch so we can provide specific advice to you directly.
- Keep your taxable income to less than £150,000 to avoid becoming an Additional Rate payer
- Reduce your taxable income by making the maximum pension contributions possible
- Use your full personal allowance of £12,500 in 2019/2020
Capital Gains Tax
- Use your full £12,000 annual exemption. I f you and your partner have a disparity in income, it may be that you redistribute funds between one another so that you can both claim the full allowance. Remember there is no tax on transfers between spouses!
- Use your £3,000 Inheritance Tax-exempt gifting
- Use your £250 per person gift
- Click on the link for all other gifting allowances available: https://www.gov.uk/inheritance-tax/gifts
Savings and Investments
- Use up ISA and JISA allowances as well as any personal savings allowances and dividend allowances that may be applicable
- Assess Investment Bonds to determine if you could use up your allowances this year or if withdrawals should be deferred
- Invest in Tax-Free Investments such as Pensions
- Use any unused allowances as they can only be carried forward for three Tax Years (providing you have the relevant income this Tax Year)
- Put money into grandchildren’s pensions (maximum of £2,880 net if they are non-taxpayers)
As you can see, there are many ways in which you may be able to manage the amount of tax you have to pay. However, not all may be possible for you and some may not be advisable for your financial situation. Our team of financial advisers are always happy to discuss the best plan of action for you and your family so please just get in touch.
Redwood Financial is one of the south’s leading Investments, Pensions,Wills, Trusts & Estate Planning providers and we are dedicated to helping families to grow, protect and enjoy their wealth. With our unrivalled knowledge of Estate Planning, Lasting Powers of Attorney, Probate, Pensions, Savings & Investments, we can advise on any situation. Come along to one of our FREE Public Seminars on Wills, Trusts & Estate Planning. Book online at Book Me A Place!: call us on 01489877 547 or Email firstname.lastname@example.org.