End of tax year deadline 5th April – Ways to minimise your tax burden
ISA tax allowances
You can invest £7200 each year, up to £3600 tax free in cash and the remainder in stocks and shares at 10% tax on the dividends.
Pension Boost
Government offers tax relief on personal and stakeholder pension contributions. Annual allowance limit is £235,000 for payments into a pension.
Interest on savings
Non tax payers can complete an R85 form on each non Isa savings accounts and interest will be paid free of tax deductions.
National insurance contributions
From 6th April the cost of topping up NICs will increase by 49%. Price of additional years increases from £421.20 to £627.60. Buying additional years can secure retirement income at a better rate than a private scheme.
Pension protection
You have until the end of the tax year to claim exemption from 55% tax on funds above the lifetime allowance of £1.65 million.
Personal allowances
To save on income tax married couples should transfer savings into the lower earners name if that person is a non-taxpayer or in a lower tax bracket.
Tax codes
Check that your tax code is correct. Coding notices go out in February and March but mistakes are made and you could pay too much or too little.
Investment allowances
Investments into venture capital trusts and enterprise investment schemes carry attractive tax breaks, but bear in mind these are high risk investments.
Offset investment losses
Selling shares at a loss can make sense when you offset against gains elsewhere. If you have no gains then register any losses on your tax return so you can offset them against future profits.
Inheritance tax
Before inheritance tax kicks in at up to 40%, you can make gifts totalling up to £3000 a year and larger gifts if you live for seven years after making them.
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