With the 2019/20 tax year not far away, we wanted to remind you of some tax planning ideas to consider.
To ensure you are able to fully utilise all of the reliefs available to you:
The Annual Allowance for pension contributions can be up to £40,000, depending upon the level of your income. You may also be able to utilise unused annual allowance from previous tax years before they expire.
Do you need to think about maximising your contributions by 5 April 2020 in order to avoid losing any unused amounts brought forward from previous tax years?
If the value of your estate might exceed the ‘standard’ Inheritance Tax Threshold* (currently £325,000 each), it is always worth considering some Inheritance tax planning in order to mitigate any potential liabilities. This can be done quite simply by using the annual exempt amount of £3,000 in relation to gifts of assets or cash each year and consider whether larger gifts over and above £3,000 can be made under the Gifts Out of Income exemption.
Depending upon their circumstances, some people might also qualify for the Residence Nil Rate Band, which may eventually add a further £175,000 to the above amount.
Please contact George Hardey (firstname.lastname@example.org) or Paul Buckley (email@example.com) if you would like us to carry out an initial forecast of your potential Inheritance Tax position and the availability of reliefs.
Capital Gains Tax
Are you planning on selling any assets that will give rise to gains exceeding the £12,000 Annual Exempt amount in 2019/20?
If so, could these assets be transferred into joint names with your spouse/civil partner in order to utilise both of your Annual Exempt amounts?
Maybe you could consider selling other assets that may have fallen in value in order to crystallise the capital losses? And if you really wanted to keep these assets, you could subsequently buy them back in your spouse’s name.
Our detailed Year End Tax Guide 2019/20 booklet is also available.
The current tax year is almost over and there is a lot to consider, but please keep an eye on the Budget on Wednesday 11 March 2020, which will give us an idea of the policies and potential changes to the taxation system for 2020/21 onwards. We will provide further updated information following the Budget.