End of Year Tax Planning
With the end of the tax year fast approaching, you may wish to consider the following in order to take advantage of the tax reliefs available:
Private pension contributions
If you have unused annual allowances, the value of any additional gross pension contributions made will extend your basic rate tax band. This means less tax is payable at the higher rate.
These contributions also reduce your assessable income for determining any claw back of child benefit and reduction in the personal allowance.
Gift aid payments
The gross value of any gift aid payments made in the year also extend your basic rate tax band and reduce levels of assessable income, as described above.
Capital gains on investment Income
Each individual has a Capital Gains annual exemption for the year of £12,300. If you are looking to make some investment disposals you may wish to do so before the end of the tax year so that this allowance is not wasted.
You may wish to speak to your broker, if you have one.
Increase in dividend & NIC Rates
From the start of the next tax year the rate of tax on dividend payments will increase by 1.25% for each tax band. Also National Insurance Contribution rates will increase by the same percentage.
With this is mind you may wish to accelerate any dividend or bonus payments to the current tax year.
For more information on tax planning, please contact Joe Wilson on 023 8046 1237.