Your tax arrangements can help your long-term financial planning if you ensure you have taken advantage of all your allowances and maximised every opportunity.

A change at the helm in the Treasury has added more uncertainty for savers and investors and whilst change doesn’t have to be negative it’s as well to take stock of the current situation. Some of the potential announcements mooted to be in the former chancellor’s Budget are after all, still a possibility.

Speculation had been mounting that one of the key announcements would be that higher earners would see the tax relief on their pension contributions cut. This has been bobbing around in the background for many years now and has so far not been actioned. This year could be the year it does make it onto the books.

Act now and get your contributions in to maximise any relief you get before any changes happen.

Since we’re approaching the end of the tax year here’s a reminder of some of the other areas you might want to consider:

ISAs

• Make sure you’ve used your 2019/20 ISA allowance (£20,000). This can be fully invested in cash if required.
• The Junior ISA (JISA) allowance for 2019/20 is £4,368.

Pensions

• Remember, pension contributions can be used in your financial planning to help reduce your income tax liability.
• Annual allowance carry forward: if you have exceeded the standard annual allowance (or tapered annual allowance), you may be eligible to utilise any unused allowance from the three previous tax years (up to £40,000 in each of the 2016/17, 2017/18 and 2018/19 tax years). The deadline to carry forward your 2016/17 allowance and qualify for tax relief is 5^th April 2020.
• Money purchase annual allowance (MPAA): this is £4,000 for 2019/20. It can’t be carried forward so, if applicable, use it or lose it.

Income tax

• Independent taxation: ensure assets/income are split wherever possible between married couples and civil partners, to maximise the use of personal allowances/ reduce or eliminate the Child Benefit Charge and possibly to move income to a lower tax band.
• Employers/business owners: consider paying salary/bonuses/dividends before 6 April 2020 to use up any personal allowances, basic rate band or dividend allowances.

Capital gains tax

• Consider realising gains, or losses, to reduce gains to the level of the annual CGT exempt amount (£12,000 per person in 2019/20). The CGT allowance can’t be carried forward.

Inheritance Tax

• The IHT nil rate band is £325,000 and remains so in 2020/21. Make maximum use of IHT gifting, where appropriate, before the new tax year.

Please contact your Financial Planner if you would like to discuss your end of year tax planning in greater depth.