6th April Reminders
Post by Mearns & Company in News
Tax planning at the beginning of the tax year can be just as valuable as tax planning at the end of the tax year
The run up to 5th April, with the Budget (and often Easter) intervening, can be a frenetic time for personal financial planning. All tends to go quiet once the new tax year begins, but the reality is that there are many planning points that are worth considering at the start of the tax year rather than leaving it until the end.
- ISA contributions (£20,000 maximum in 2017/2018) are best made at the start of the year rather than the end, as it means the tax benefits are enjoyed for nearly a year longer.
- A similar argument applies to pension contributions, although if your income for the year ahead is uncertain, the case for delay is stronger.
- The dividend allowance is £5,000 per tax year, so it is worth checking early on how much dividend income you are likely to receive and whether that prompts any investment changes. If you are married or in a civil partnership, that might mean transferring assets between the two of you.
- Similar considerations of who holds what apply to deposit accounts and the personal savings allowance of up to £1,000 a year each.
- The many thresholds built into the income tax system are a driver to working out what might be your total income in the tax year as soon as possible. If you know in April you are likely to be near a threshold by next March, you have that much more time to plan accordingly.
If you would like a tax year beginning review of your financial planning, please talk to us now – don’t wait until next March.
The value of tax reliefs depends on your individual circumstances. Tax laws can change. The Financial Conduct Authority does not regulate tax advice. The purpose of this blog is to provide generic and technical guidance and should not be interpreted as a personal recommendation.
If you have any questions or would like advice please use our contact page here.