Last Minute End Of Year Tax Planning For Individuals

Table of Contents

Tax Year End


With only a month to go there is still time to save some tax with some end of year tax planning. Here are some ideas:

Use your spouse’s personal allowance

If your spouse is a lower rate or non-taxpayer, it’s possible for them to transfer 20% of their unused personal allowance to their spouse which could save up to £250 in tax.

Also, if you have income-producing assets (for example, buy-to-let property or even saving accounts), you could transfer these to the lower rate or non-taxpaying spouse’s name to lower your overall Income Tax liability. Assets can be passed between spouses without CGT liabilities.

Individual Savings Account (ISA) allowance

The tax-efficient ISA allowance for the current tax year is £20,000 per person. A married couple can therefore invest £40,000 before the end of the tax year on 5 April. There is no Income or Capital Gains Tax (CGT) no need to declare this on your tax return. If you do not make use of your ISA allowance it cannot be carried forward, so make sure to use it!

Tax-free pension allowance

The standard annual pension allowance is 100% of earned income or £60,000, whichever is higher, in the current tax year. You can also carry forward any unused annual allowance from the three previous tax years, so long as you were a member of a registered pension scheme for the years you wish to maximise contributions for. The cash actually needs to be in the pension by the year end. You can’t back date it.

Save into a pension for your children or grandchildren

Consider saving up to £3,600 into a pension for your spouse, civil partner or a child.
This is possible even if they have no earnings of their own, to obtain basic rate tax relief on the contributions.

Capital Gains Tax (CGT)

Individuals have an annual CGT allowance that currently enables them to make gains on investments of up to £6,000 falling to £3,000 in 24/25 with no tax due. Any gains in excess of the allowance are charged to CGT at either 10% or 20% with disposals of residential property being taxed at 18% or 28%, depending on if the individual is a higher rate taxpayer in the year the gain arises. Married couples may be able to use each other’s allowances by transferring assets before they are sold.

Inheritance Tax (IHT) Annual Gift Allowance

You may wish to consider using your annual gift allowance of £3,000. Although you can carry this forward for one year, it is then lost if it is unused.

Please do not hesitate to get in touch if you would like advice on any of this. You can contact us here:

John McLaughlin Chartered Accountant Scotland

John McLaughlin

Sutherland Black are plain talking accountants based in Scotland. We’ll support your business growth and goals. Talk to John today for friendly yet expert accounting advice.

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