The end of the tax year is approaching, so now is the time to review your finances and make the most of your money.
Here are four key areas to focus on:
Maximise Your Pension Contributions
Contributing to a pension reduces your taxable income and grows your retirement fund. Basic rate taxpayers receive 20% tax relief on contributions, while higher and additional rate taxpayers receive even more.
You might also want to explore the option of signing up to a Salary Sacrifice scheme, which allows you to contribute a portion of your pre-tax salary directly to your pension, reducing both income tax and National Insurance contributions.
Use Your Capital Gains Tax Allowance
When you sell assets (property, investments, etc.), you may owe Capital Gains Tax on the profit. With that in mind, it’s worth thinking strategically about when you intend to sell assets, so you can make sure you remain within the allowance and avoid paying unnecessary tax.
The current Capital Gains Tax allowance is £3,000 (2024/25). Strategically time your sales to stay within the allowance and minimise tax liabilities.
Use Your Full ISA Allowance
ISAs offer tax-free growth on savings and investments. Choose between Cash ISAs for stability and Stocks and Shares ISAs for potential growth. Make the most of the current ISA allowance (£20,000 - 2024/25) before it's too late.
Claim Gift Aid When Giving to Charity
Gift Aid is a simple way to boost the value of your charitable donations without incurring any extra personal costs yourself.
That’s because this mechanism gives charities the ability to recoup the basic tax rate of 20 per cent on your donation. So for every pound you contribute, the charity can claim an extra 25p.
Gift Aid allows charities to reclaim basic rate tax on your donations, increasing their value and maximising the impact of your contributions.
Take Action Today
The complexities of tax law can be overwhelming. But with the end of the tax year just around the corner, now’s the time to act and schedule a call with your financial planner, so you can be confident you’re making the most of your tax allowances and that your money is working hard for you.
Call us now to discuss your options.
The above article is for information purposes only and should not be taken as advice. The tax treatment is dependent on individual circumstances and may be subject to change in future.
The value of units can fall as well as rise, and you may not get back all of your original investment. A pension is a long-term investment. The fund value may fluctuate and can go down. Your eventual income may depend upon the size of the fund at retirement, future interest rates and tax legislation. Advice on tax planning is not regulated by the Financial Conduct Authority.
