The start of a new year, see the end of another tax year. Now is a good time to review if you have taken maximum benefit of this year’s tax allowances.

It’s 2020 and a new year has just begun, but the end of the tax year is only a few months away. This means there are only a few months to ensure you optimise your taxation for this financial year.

Maximising ISA allowances

Savers have an annual limit of up to £20,000 to enjoy this tax year. Where possible this should be topped up before the end of the tax year, when it resets. There are a wide range of tax-efficient ways to contributing to an ISA, including cash or stocks and shares.

Review pension contributions

Similar to ISA’s, there are annual limits to pension contributions. This is set at either 100% of your gross salary, or £40,000, whichever is lower. This applies to both individual and employer contributions.

Inheritance Tax

Giving a cash gift can be an effective form of inheritance tax mitigation. Cash gifts are subject to an annual limit, which is also reset each year.

Up to £3,000 can be gifted each year, tax free.

Capital gains allowance

Tax relief on any profits you make from an asset is also constrained by an annual allowance for the financial year.

This year it is set at £12,000. This doubles for any jointly owned assets in a marriage.

The capital gains allowance can not be carried over to next year, so it is important to review any gains made, before April 6th.

About the author

Trading and Investment

Traded the markets for over 15 years, including Commodities, Bonds, Currencies, Equities, and Indices. I have also worked as a Chartered Financial Planner.
CeMAP, CeFA, DipFA, AdvDipFA, Ba(Hons) Economics, Chartered ALIBF

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.