If you haven't put the necessary time into financial planning so far, there is still enough time to make use of products out there that could help you get the most out of your savings and investments as well as keeping as much of it away as possible from the hands of the taxman.
Here we have a few of the things that you ought to consider as soon as possible. Even a few hours spent researching into products and getting your financial house in order could potentially save you thousands of pounds over the next tax year and beyond.
Ensure each spouse uses their full personal allowance for income tax purposes where possible. Annual income of less than currently £8,105 is not liable to tax. You should consider the possible transfer of income producing assets to ensure that Personal Allowances are not wasted.
Don't forget that your children are also entitled to a personal allowance and you should look to make full use of these. Junior Individual Savings Accounts (JISAs) are a great away to squirrel away funds for your children's future.
Pension contributions of up to £3,600 gross per year can be made by individuals with no taxable income. The net contribution after tax relief contributed at source by the UK Government would be just £2,880.
Bed and Sipp - Use existing investments to make a pension contribution. Even if you don't have cash available to invest in a pension, you can potentially use other investments.
Take this example from Fidelity: Peter has some shares which he bought 10 years ago for £10,000. Today they are worth £15,000. He sells the shares, realising a gain of £5,000, which falls within his Capital Gains Tax allowance of £10,600. He invests the proceeds in his pension and immediately repurchases the share portfolio within his SIPP.
As well as having now sheltered his investment within a pension for tax purposes, he also benefits from immediate tax relief of £3,750 which is added to his pension. If he is a higher rate taxpayer Peter can claim a further £3,750 after the end of the tax year.
Try our easy-to-use calculators and make your money work harder.
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