As the final weeks of the 2024-25 tax year approach, vigilant taxpayers are keenly aware of the impending deadline: the 6th of April. This date marks the cut-off for various tax-free allowances ...
One prominent strategy involves Inheritance Tax gifting, where you can gift up to £3,000 per year without incurring tax liabilities. This amount can be carried over to the next tax year if unused, making it an effective way to reduce the eventual inheritance tax burden on estates.
Another vital area to consider is Capital Gains Tax, particularly if you have investments or property. By crystallising any gains before the year ends, you can make full use of the annual exempt amount for CGT, which is currently set at £3,000.
This strategy not only facilitates better tax management with investments, but also enhances your overall financial position. Those who delay could risk incurring higher tax liabilities moving into the next tax year.
Pension contributions represent yet another opportunity that should not be overlooked. The current annual allowance for pension contributions stands at £60,000, offering an exceptional route to bolster retirement savings. Contributions not only reduce taxable income, but also benefit from tax relief at your marginal rate.
The speculation surrounding potential tax policy announcements in the upcoming Spring Statement - set for the 26th of March - adds urgency to this topic. Economic and fiscal uncertainties may prompt the government to revise tax allowances and reliefs in the future. Proactively managing one's financial affairs now could offer a valuable safety net in light of potential changes on the horizon.
Don't wait until it is too late - engage with a financial adviser like me may further enhance the strategic use of tax-free allowances available to you. Careful planning is essential to ensuring that you do not miss out on the unique opportunities that the 2024-25 tax year presents.
The approaching deadline of the 6th of April serves as a crucial reminder for taxpayers to maximise their tax-free allowances. By understanding and utilising these exemptions effectively, you can secure your financial future and ensure you optimise your tax position before it is too late.
Act now to take full advantage of the tax-free allowances available to you.
If you'd like to find out more about anything I've written here, do call me on 01908 774323 or leave a comment below and let's see how I can help you.