End of Tax Year Financial Planning

← BLOG - End of Tax Year Financial Planning

The 5th April is almost upon us, and at this time of the year we encourage our clients to take some time to give their finances a review. This will ensure they are not missing out on any allowances or tax planning opportunities.


Main Considerations;



Each tax year, individuals have an available ISA allowance of £20,000. This allowance is a “use it or lose it” as you are unable to carry any of it forwards. ISAs are a great tool which allow your money to grow tax free and therefore work harder for you. The allowance can be spread across cash ISAs, stocks and shares ISAs and Lifetime ISAs (for those under 40 years old)



A pension can be a very tax efficient way of saving for retirement. Contributions will normally attract tax relief by way of an additional amount paid into your pot by the government. With greater flexibility on retirement, they are a more attractive choice than ever for those saving for retirement. Different to ISAs, if you don’t use your annual pension allowance (which is 100% of your annual earnings capped at £40,000) then you can “carry forward” the past 3 years unused allowance to make a lump sum contribution.

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Gifting Allowances for Inheritance Tax (IHT)

Each person has a nil rate IHT allowance of £325,000 on their assets. Assets beneath this threshold are not subject to a IHT charge. However, if your assets breach this limit then a tax charge of 40% applies to the excess. HMRC allows gifts of £3,000 to be made each tax year which can be carried forward a year if unused from the previous year. A couple could therefore move up to £12,000 out of their joint estate before the end of the tax year.


Capital Gains Tax (CGT)

Assets you hold outside of a tax wrapper (such as an ISA or pension) can be subject to a CGT charge if sold or transferred. This tax can apply to stocks and shares, property or other valuable items. Each person has a tax-free CGT allowance of £12,300 for tax year 2020/21. The rate of tax can be complicated to work out, but generally basic rate taxpayers pay 10% and higher rate taxpayers 20% (18% and 28% respectively if a property is sold). You may be able to split the gain over 2 tax years to reduce your bill, or transfer assets to a spouse to make use of dual allowances. This can be complicated and is worth seeking expert advice before you decide on plan.


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