Tax Year Planning
Actions to think about
Each tax year offers allowances and financial planning opportunities
Act now to make sure that you don’t miss out
Making the most of your ISAs
An Individual Savings Account, or ISA, is free from Income Tax and Capital Gains Tax, making it one of the most tax efficient ways you can save for the future.
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If you’re age 18 or over you can invest up to £20,000 each year (known as your annual ISA allowance).
Those aged 18 to 40 can open a Lifetime ISA up to £4,000, which the Government will boost up to £5,000.
ISAs are free from Income Tax and Capital Gains Tax.
What do you need to think about?
- Are your existing ISAs performing in line with your attitude to risk?
- Is it worth switching existing investments into ISAs to be more tax efficient and reduce your costs?
- Would bringing your ISAs together into one place save you some cost? We can help you work out whether this is the best thing to do for your circumstances.
- Have you reviewed your other investments to see if any updates are needed to help meet your financial goals?
Pension Savings
Pension contributions are an excellent tax efficient way to save for your future.
You can contribute up to £60,000 each year (known as your Annual Allowance) and bring forward unused allowances from the previous three years.
From age 55 you can take up to 25% of your pension tax-free
Personal contributions up to your annual earnings receive Income Tax relief until you’re age 75.
What do you need to think about?
- If you are over age 55 we can advise you how to take your pension as retirement income.
- Would bringing your pensions together into one pot save you some cost? We can help you work out whether this is the best thing to do for your circumstances.
- Have you used your full Annual Allowance, or unused allowances from previous tax years?
- Can you restart pension contributions now the Lifetime Allowance tax charge has been abolished?
- If you have faced a restricted pensions annual allowance since tapering was introduced in 2016, we can advise you on alternatives such as Enterprise Initiative Schemes and Venture Capital Trusts. These offer up to 30% Income Tax relief, but can be high risk.
Reduce your Inheritance Tax bill
Inheritance Tax (IHT), is the tax paid on the value of your estate when you die. There’s plenty you can do during the tax year to ensure more of your wealth is passed on to your loved ones tax efficiently.
The £325,000 nil rate band and £175,000 residence nil rate band remain frozen until 2028.
If your estate is less than £325,000 there is no IHT to pay.
Making lifetime gifts now will reduce the value of your estate after seven years.
You can also gift money using your £3,000 annual IHT exemption. If unused, this can be carried over to the following year.
What do you need to think about?
- Understand the tax implications of passing on wealth during different times.
- Can you make tax efficient lifetime gifts and help with pension contributions or ISA savings for others?
- Do you have any unused gift allowance from the last tax year that you could use?
- Can assets be transferred to your spouse/civil partner or into a trust to help protect your estate from IHT?
- Your Origen adviser can suggest options depending on your circumstances to pass on more of your wealth to your beneficiaries. For information on how to pass more of your wealth on tax efficiently, read Origen’s Guide to Inheritance Tax Planning.
Take advantage of tax allowances
With UK taxpayers set to have the highest tax burden since records began, there are ways you can reduce your tax bill and help your savings go further.
The tax free personal income allowance is frozen at £12,570, while the 45% additional rate tax threshold is lowered to £125,140*.
From April 2024 the Capital Gains Tax allowance is halved to £3,000 and the Dividend Allowance is also reduced to £500.
What do you need to think about?
- Have you considered using your pension annual allowance to reduce your taxable income?
- With Capital Gains Tax and Dividend Tax allowances halved from April 2024 what actions are needed to make the most of these allowances? Do you have a General Investment Account, or hold single-sector shares, which could be particularly affected?
- Is it financially beneficial to pass some of your income generating assets to a spouse/civil partner in a lower tax band?
- Our advisers can also help you to review how you use your investments to provide additional income or to meet your needs in retirement. A careful strategy can help to reduce the tax you pay, which may include reviewing asset ownership, to help household income go further.
*Personal tax bands in Scotland are different. Please see our Guide to Tax Year Planning for details.
Origen Guide to Tax Year Planning
Please read our guide on the key financial planning actions you should consider to maximise your tax year allowances.
Let’s find ways to maximise your
tax allowances
We’re here to help you make the best financial decisions, so you can focus on what’s important to you and the things you want to do.
An Origen adviser will chat through how you can maximise your savings and suggest any actions to put in place this tax year.
Please contact your Origen adviser, or call our Client Services Team on 0344 209 3925* or email clientservices@origenfs.co.uk to arrange a call at a time to suit you.
*Calls are charged at your phone company’s basic rate.
All calls are recorded for business purposes.
This information is for UK residents and should not to be taken as financial advice. Before you take any action based upon this information, you should seek advice regarding suitability and tax consequences.
CA10754 Exp: 12/2024
