Its nearly the end of the tax year – don’t miss out!!!!!
The end of the tax year is the 5th April – there is still time to get those last minute items in that makes the most of your allowances and reliefs.
Top up your ISA
The maximum amount that you can put into your ISA increased to £15,000 last July plus the 50% restriction that applied to cash ISA was removed. If you’ve not used your allowances you can double up by doing £15,000 on or before the 5th April and then another £15,000 on the 6th April.
Maximize tax relief on pension contributions
Anyone under the age of 75 can contribute into their pension and benefit from the tax relief available. Even if they’ve got no relevant earning (self employment or employment) they can still contribute up to £2,880 net which grosses up to £3,600 into the pension – an instant return of 25%!!!!
If they have their own company (or they have sufficient relevant earnings) it can contribute up to £40,000 a year or up to £190,000 if they’ve been a member of a scheme but not contributed anything in the last 5 years. If they have contributed the amount contributed over that term is knocked off the £190,000 – after corporation tax relief this can be an efficient way of building up significant funds to provide a valuable source of income in retirement.
Take advantage of your annual capital gains tax exemption
For 2014/2015 everyone has an exemption of £11,000 – meaning that you can make a gain of £11,000 and not pay a penny of capital gains tax. If the gain is going to be more than £11,000 then consider selling part on or before the 5th April then the rest on the 6th April and utilize two years’ worth of exemption.
Consider subscribing for EIS shares
When an individual subscribes for shares in a qualifying company – typically a small start up with a holding of no more than 30% – income tax relief equal to 30% of the amount invested can be claimed. The tax relief can also be carried back to the previous year or split over two years.
The amount invested in EIS shares can be used to defer paying tax on capital gains as long as the amount invested is equal to or in excess of the capital gain. Assuming that EIS shares are held for 3 years or more then the income tax relief is not clawed back and any gain on the sale of the shares is exempt from income tax.
For further information please don’t hesitate to contact us