There's still time to consider some of these savings on your personal allowance before the tax year ends on 5 April.
Use your pension allowance
The amount you can put into a pension each tax year is based on your income and is capped at £40,000, or just £4,000 if you’re already drawing a pension.
If you currently contribute to a workplace pension, check with HR how much you have paid so far and how you could potentially put more in before the end of the tax year. If you can’t do this, there’s nothing to stop you setting up a private pension separately and putting in any extra cash you can afford. And if you have unused annual pension allowance from the past three tax years, you may be able to carry it forward to use this year.
Use (and share) your personal allowances
If you have a spouse or civil partner who’s in a lower tax band than you, or doesn’t pay tax, transferring any savings into their name could cut your income tax bill, as the savings interest will be subject to their tax rate and personal allowance.
Don’t forget your Capital Gains Tax allowance (CGT), paid when you sell assets such as shares or a buy-to-let property. As of September 2023, you can make up to £6,000 on these kinds of sales before you have to pay tax on them, but on 5 April 2024 this will be reduced to £3,000 – so if you’re planning to sell some assets, do it before then.
Use your ISA allowance (and everyone else’s!)
If you have any spare cash and haven’t used your ISA limit (£20,000), it’s worth considering this option. You can mix and match between a Cash ISA and a Stocks and Shares ISA. Don’t forget that your offspring under 18 can also put money into a Junior ISA (or you can put it in for them), to a limit of £9,000 per tax year (2023/24 figure).
Give some cash away
If you’re thinking about inheritance tax (IHT), consider giving some money to your children now. You can give away gifts worth up to £3,000 in total in each tax year and these gifts will be exempt from IHT. You can also give up to £3,000 in respect of the previous year if this allowance wasn’t used, meaning a couple could give away up to £12,000 now and a further £6,000 on 6 April, potentially saving £7,200 of IHT over two tax years.
Don’t forget your uniform
Do you have to wear a uniform for your job, and clean or repair it yourself? If so, you should get a tax rebate on that – and you may be able to claim for the last four years – but you’ll need to write a letter to your tax office. It isn’t difficult – find out how to do it at Moneymagpie.com.
Ensure your tax code is correct…
Check your tax code at the Government's Income Tax website. Apparently, millions of UK residents are on the wrong tax code and could be overpaying as a result. You never know, you might be owed a little windfall!
Jasmine Birtles is founder of Moneymagpie.com and regularly appears on TV providing financial advice.
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