The beginning of a new calendar year should serve as a timely reminder that we’re only months away from the end of the current tax year. It might feel at the moment as though there’s plenty of time until the beginning of April, but ensuring you make use of the remaining months before they disappear is always a good idea. Here are our top four tips for ways to make the most of this tax year whilst you can.
- Maximise your ISA contributions – Making the most of any Individual Savings Accounts you have is normally a sensible way to invest your money. If you reach the end of the tax year without reaching the investment limit for your ISA, there’s no way to carry it over, so it could be tempting to invest as much as possible. The limit for the 2016/17 tax year is £15,240 and, unlike a few years ago, can be entirely made up of cash if you wish.
- Check your pension contributions– Keeping an eye on your pension contributions at least once a year is a good idea. You can use pension contributions to help you manage tax liabilities, but high earners should keep the lifetime pension allowance in mind. The current allowance is £1 million, having been reduced from £1.25 million in April 2016, so anything over that amount in your pension is taxable.
- Don’t forget your Capital Gains Tax Allowance – The Capital Gains Tax Allowance for the 2016/17 tax year is £11,100 per individual, which means that couples can pay no tax on up to £22,200 of capital gains. Genuine gifts from a civil partner or spouse do not count towards the allowance, and there are other exemptions too, so it’s worth having a look at where you could make some tax savings.
- Boost your children’s savings too – Whilst thinking about your own financial planning, it can be easy to overlook the ways any offspring under the age of 18 can benefit too. If they have a Junior ISA, make the most of the £4,080 investment limit. Don’t forget they also have the same Capital Gains Tax Allowance and can make pension contributions of their own.