Minimise your tax liabilities before the year end

With the end of the 2019/20 tax year firmly on the horizon on 5th April, now is a good time to step back and check you’ve done everything you can to minimise your tax liabilities in the 2019/20 tax year.  

We’ve focussed on some of the top personal tax planning points to think about before the end of the tax year:

Use your annual pension allowances

1. Annual allowances can be carried forward for a maximum of 3 years – check whether you’ve got any unused allowances from the 2016/17 tax year that you need to use before 5th April?
2. Making pension contributions could help reduce your high income child benefit charge
3. Making pension contributions could help claw back lost personal allowance if your income is over £100k

Make personal charitable donations before 5th April

1. Again, making pension contributions could help reduce your high income child benefit charge
2. Making pension contributions could help claw back lost personal allowance if your income is over £100k

Use your savings allowances

The personal savings allowance means that basic rate taxpayers don't pay tax on the first £1,000 of savings income (higher rate taxpayers don't pay tax on the first £500 of savings income). It's worth looking to see if you can charge interest on directors' loan accounts if you’re a director or shareholder of a company.

Use your £5k savings starting rate bandIs this really something you can control very easily?!

Use your £2k dividend allowanceThe first £2,000 of dividends received in a tax year are tax free, regardless of your other income, so make sure all shareholders received at least £2k of dividends, including spouses.

Use your £12k capital gains tax annual exemption Similar to your personal allowance for income tax, every individual has a £12,000 (for 2019/20) capital gains tax annual exemption, which means the first £12k of capital gains in a tax year are tax free – check to see if there’s a way you can use this before the end of the tax year.  If you don’t use it, you’ll lose it, it can’t be carried forward to future tax years.

As always, if you have any questions on any tax planning opportunities ahead of the tax year end on 5th April, we’ll be more than happy to talk.  With the recent tax changes announced for the new tax year in the latest budget (you can find our budget summary here), now is also a good time to step back and review your whole structure to ensure it is the most tax efficient for your circumstances.