The 5 April 2019 deadline for the current financial year-end is fast approaching. Here are a few tips from Harmit on things you may still be able to do:

 

 

Charitable donations
Tax relief is available for cash gifts to UK charities via the Gift Aid scheme.  So if you’re a 45% taxpayer and you make a cash donation of £20,000, the charity can reclaim £5,000 from HMRC and you can get tax relief of £6,250 via your tax return.

ISAs
The maximum you can put into an ISA is currently £20,000, but any investment returns or interest are tax-free.  Junior ISAs are also available for children under the age of 18, with the limit currently £4,260 (£4,368 for the 2019/20 tax year), and this remains tax-free until their 18th birthday when it gets converted into an adult ISA. None of the ISA allowances can be carried over to the following year so it is a case of ‘use them or lose them’.

Pensions
There’s a limit of £40,000 on the tax-deductible pension savings that anyone can make each year. However, if you earn more than £150,000 this so-called ‘annual allowance’ is reduced by £1 for every £2 of income between £150,000 and £210,000 – which can lead to an annual allowance of just £10,000 for those with taxable income of £210,000. If this applies to you there may be scope to pay more, but only if you have any unused allowances in the previous 3 years.

Inheritance tax
An area you can also consider is whether you have used your Inheritance gifting exemption. You can give away £3,000 of gifts each tax year without them being added to the value of your estate. Any unused allowance from the previous year can be carried forward, so depending on your circumstances you could have £6,000 available.

Gifts
Assets given to a spouse or civil partner are normally free of capital gains tax (CGT).  If they were to then sell the assets, the resulting gain can be covered by their CGT annual exemption or their capital losses and may even attract a lower rate of tax. But for this to be effective, the gift must be “absolute and complete”.

Finally – dates for your diary in relation to your tax return for the year ending 5th April 2019:

  • 31st October 2019 – deadline for paper submissions
  • 31st January 2020 – deadline for online submissions.

If you would like any help on how to make the most of your tax planning, do get in touch.