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Now or Never - Year End Tax Planning Tips

Newsletter issue - March 07.

With the tax year end approaching on 5th April we thought we'd remind you of some of the key planning opportunities available now. After 5th April, it's usually too late...

  • Use up your ISA annual investment allowance of £7000 for tax free investing.
  • For Buy to Let properties, if repairs are needed, do them now to bring forward the relief by a year.
  • Use up your capital gains annual exemption by realising investments to use it up. Transfers between spouses are tax free and if planned properly can result in use of two annual exemptions.
  • Make pension contributions to get tax relief of up to 40%. Even pension contributions for your children of £3600 (gross) can me made which will only cost you £2808.
  • Realise capital losses by selling the investment to cover any capital gains above your annual exemption limit. Some can even be set against income. It could be bought back by yourself if you wait 30 days or perhaps use an alternative vehicle to buy it back immediately.
  • Consider other investment based tax reliefs such as the Enterprise Investment Scheme and Venture Capital Trusts which can give substantial amounts of tax relief.
  • Employees should consider repaying the cost of private fuel if it is less than the tax cost of the benefit in kind.
  • Look at paying bonuses prior to 6th April to avoid potential NI increases in the budget.
  • Make gifts to use up your IHT annual exemption of £3000.
  • Ensure you use up your personal allowance and basic rate tax bands. One way is to vote company dividends as necessary.
  • For traders with 31st March year ends, invest in vehicles and plant and machinery now rather than later to accelerate capital allowances.

For a tax review appropriate to your own circumstances and advice on these and other year end planning opportunities, please contact us.