It’s that time again. Daffodils are blooming, the days are getting longer and Cheltenham Races are not far around the corner (maybe it’s just me who is concerned with that one). It’s also the end of/ start of the tax year, and with that comes all the usual allowance resets.

This year it is more relevant than ever with some rather drastic changes in taxation coming next year and tax going up.

As a reminder, the key changes are:

• Capital Gains Tax (CGT) allowance being cut to £6,000 from current £12,300
• Additional rate (45%) threshold cut to £125,140 from £150,000
• Dividend allowance being cut to £1,000 from current £2,000
• State Pension will rise with September CPI of 10.3%

There’s plenty of change, so here are just a few of the areas you should be thinking about:

Pension contributions

An old favourite that may be a target for the Chancellor. Tax relief at 40% or 45% is rumoured to be a target (again), but one thing’s for sure – it’s not going to go up! Use it or lose it and the same goes for any previous unused allowances. Both can be extremely tax effective.

CGT allowance

The first £12,300 of capital gains are tax-free which is falling. This cannot be re-invested in the same fund for 30 days, but can be moved into other assets. This is a very cost-effective way of reducing any taxes in the future.

ISA contributions

£20,000 per year per person tax-free. No tax ever on any gains, income, dividend or anything. Simple, easy and the best cornerstone for every investment portfolio.

Entrepreneurs and business owners

Making an employer pension contribution has a double benefit. The first is it is the cleanest, tax-free way to get money from your company to your personal account. The second is the payment is seen as a justifiable business expense and therefore you get corporate tax relief on it as well.

And finally…

One from maybe left field, but so important. Do you have a will and is it fit-for-purpose? You would not believe the number of people who don’t have up-to-date wills. It’s not for you, you won’t be around anymore – but I promise it makes a massive difference to your loved ones who have to do all the extra hard work with no will in place. Just get one done – please.

If you want to discuss any of these points with one of our qualified advisers who have been in your shoes, please get in touch.