Two weeks to the end of the 15/16 tax year. Still time to do some last minute tax planning………………….
Personal Pension Payments: If you are a 40% tax payer, and have received PAYE income during the year, a payment into a personal pension from taxed income will get you 40% tax relief. The pension company will gross up the payment by 20% and your Basic Rate Band will be increased by the amount of the gross pension payment. The money has to actually be paid in the the tax year.
ISA Contributions: If you have money in a taxable savings account or are investing in stocks and bonds then it makes sense to do this through an ISA. The 15/16 allowance is £15,240.
Dividends: If you run a Company consider declaring a larger than usual Dividend if your Company has the reserves. The new 7.5% dividend tax comes in on the 6th of April so dividends declared before the end of this tax year will avoid this.
Inheritance Tax Exemptions: You can gift up to £3000 a year plus as many gifts of less than £250 to other people as you like. The £3000 exemption can be carried forward for one year but otherwise these exemptions are lost as the years go by.
Capital Gains: If you have potential Capital Gains then selling now to use your CGT allowance is sensible. However a reduction in CGT rates was announced in the Budget last week so it may be worth waiting if part of the gain is taxable.
Child Benefit: If your income is over £50,000 then your Child Benefit will be progressively reduced. Income reduction through Pension Payments or other means may be worthwhile.
These are just some of the measures that you can use to make sure you use all your tax allowances. If you would like any more help with your taxes please give us a call.