New year’s resolutions to save tax

New year's resolutions to save tax

New Year’s Resolutions

It is at this time of the year that we think about New Year’s resolutions. It is also a good time to start planning your tax affairs before the end of the tax year on 5th April.
 
Maximising your ISA allowances for the 2019/20 tax year (currently £20,000 each) is an obvious tax planning point. An ISA allowance is often described as a tax wrapper that protects your money from the taxman.
 
A cash ISA can be used to future proof your money in case regulations or economic circumstances change, including scenarios like:
  • interest rates go back to pre-financial crisis levels.
  • you move up a tax bracket
  • the personal savings allowance is cut
  • you want to move into stocks and shares
  • you want to pass on your ISA after your death
For those looking to do some inheritance tax planning it would be a good time to review (or make) your Will.

Pension Planning

You might also want to consider increasing your pension savings before 5 April 2020 as the unused annual pension is lost after three years.
 
Depending on their earnings, the maximum pension contribution for most taxpayers is £40,000 each tax year. This limit covers both contributions by the individual and their employer. Note that under the current rules the net after tax cost of saving £10,000 in a personal pension for a higher rate taxpayer is only £6,000.
For more information or for help with any of the advice on this page, please contact us on 01295 477 250 alternatively you can email hello@progressaccountants.com.

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