Last last last minute tax planning
It is now mid March and two weeks (more or less) left of this tax year.
Whilst Figurit do everything in our power to make you, our clients, aware of the tax saving methods available each year and make recommendations thereon, for those of you who didn’t for whatever reason take action, we do have the final days left to play with. Here are our practical tips for consideration and action:
Consider topping up your pension contributions before the tax year end
- The annual pension allowance reduces from £50,000 to £40,000 from 6 April 2014
- Unused allowances can be carried forward for the past three years providing you have an open pension scheme
Capital Gains Tax
Consider selling any shares where the gain is less than £10,900 (the annual exemption allowance) before 6 April 2014.
Consider using your 2013/14 annual ISA allowance:
- Adults – £11,520 (of which up to £5,760 can be in cash)
- Children – £3,720 (of which all can be in cash, and as long as the child doesn’t have a Child Trust Fund)
Consider using your annual Inheritance Tax (IHT) exemption to reduce the size of your estate:
- £3,000 exemption + £3,000 for the previous year if not used
The Annual Investment Allowance enables investment into capital equipment (including machinery, IT equipment and some fixtures and fittings) to the value of £250,000 per year until 31 December 2014 with 100% tax relief.
In summary, many of these tax planning opportunities will be available in a similar form for next year but typically with different margins or rates of interest or tax relief. Some more favourable, some not.
If you are expecting a large tax bill though for the year ended 5 April 2014 a bit of “last last last” minute tax planning could have a positive effect.