The tax-efficient tips you need to know about

Completing tax year end tasks can seem like a mad dash, with the finish line being the 5th April.

With so many planning opportunities available, knowing where to start to make the best use of your exemptions and allowances can be challenging. 

This in mind, our experts at The Private Office have produced a set of tax planning tips for you to consider before the tax year ends on 5th April 2020.

1. Use your Capital Gains Tax (CGT) exemptions

Make sure to use any remaining CGT exemption for 2019-20 by making disposals before 6th April 2020.

Remember you can transfer assets to your spouse or civil partner as an outright gift if they have any unused annual exemption or capital losses.

2. Top up your ISA Allowances 

Investment income and growth within an ISA are tax-free! Maximise your tax efficient saving opportunities by making full use of your £20,000 ISA allowance. 

Consider investing into a Junior ISA (JISA) for your children or grandchildren or topping up existing JISA (or Child Trust Funds) to the annual limit of £4,368.

Remember, if your child is between the ages of 16 and 18, they can also invest up to £20,000 in a Cash ISA – a total tax efficient investment of £24,368 before 5th April 2020. 
 

3. Make use of your pension allowance 

Have you made full use of your annual pension allowances this year? If your relevant earnings are enough, tax relief is available at c.60% on income falling between £100,000 and £125,000.

4. Reduce your Capital Gains tax bill 

If you are a higher or additional rate taxpayer and have crystallised capital gains in excess of your annual exemption you may want to consider making a pension contribution before 5th April 2020.

In addition to income tax savings, you could reduce your CGT tax rate from 20% to 10% on excess gains. 

5. Regain your annual pension allowances 

Has the amount you can pay into your pension been tapered due to your income?

If you have excess cash available to fund a personal pension contribution and have unused pension allowances from previous years you may be able to reinstate your £40,000 allowance before 5th April 2020. 
 

6. Recover your child benefit 

Did you know that making a pension contribution can reduce the tax charge on your child benefit if you are a high earner?

If you reduce your income to below £50,000 then you can completely reverse the tax charge.

Like what you have seen? For more great tax related information take a look at our article on maximising allowances. Worried about your tax planning? Speak to a financial adviser who can help you.