There is rarely a shortcut to financial security, but having a plan and taking steps over a number of years can get you to where you want to be.
Here are some steps you can take to help ensure you make to most of your tax allowances and exemptions before it’s too late.
- Those wishing to maximise pension saving should consider fully utilising their annual allowance. Unused allowances can be carried forward but only from the three previous years. If your 2018/19 allowance is fully utilised, you should review whether you have any unutilised allowances from the 15/16 tax year first.
- If you are thinking of making a large pension withdrawal it could make sense to spread the withdrawal over two or more tax years to minimise your Income Tax Liability.
- Take advantage of your annual Capital Gains Tax exemption by realising gains of £11,700 in this tax year. Those with larger liabilities might look to take gains over two tax years and make use of tax-free inter-spouse transfers.
- Use your IHT gifting exemption of £3000 for this year.
- Make use of your ISA allowance of £20,000
- Check your spouse or partner has maximised their ISA allowance to fully utilise the combined allowance of £40,000
- Make Contributions of up to £4,260 per child into Junior ISA’s to help them get a head start.
- If you own a business and depending on your earnings, consider taking dividend income instead of a salary to avoid National Insurance Contributions. The first £2000 of dividend income is tax free.
- Divert your company’s pre-tax profits into a personal pension to reduce your company’s liability to corporation tax, income tax and NIC’s. Contributions will need to be paid before your company’s financial year-end in order for the business to qualify or the deduction in that accounting period.
Should you wish to speak to one of our team on tax planning, to arrange a free consultation, please contact our Tax manager, Noel Convery or Director, Sean Cavanagh.
Office: 028 8775 5880
Noel Convery: email@example.com
Sean Cavanagh: firstname.lastname@example.org