Focus on your year end checklist
Philip Hammond’s spring Budget could make early tax year end planning all the more important in 2017.
Philip Hammond’s first – and last – spring Budget on Wednesday 8 March could make early tax year end planning all the more important in 2017.
Pensions – In a paper published alongside the 2016 Autumn Statement, the Treasury noted that in 2014/15 tax relief on pensions “costaround £48 billion, with around two thirds of the tax relief going to higher and additional rate taxpayers.” The Treasury paper then remarked“…it is important that resources focus where there is most need.”
Mr Hammond’s predecessor shied away from ending higher (and additional) rate tax relief on pension contributions in 2016. Given the state of government finances, Mr Hammond may be less timid.
Individual Savings Accounts (ISAs) – The current ISA contribution limit is £15,240, rising to £20,000 in 2017/18. Maximising ISA contributions remains important if you are a higher or additional rate taxpayer:
- All income within ISAs is free of personal UK tax.
- An ISA and all its tax benefits can effectively be inherited by a surviving spouse or civil partner.
- Gains made within ISAs are free of capital gains tax (CGT).
CGT annual exemption – As a broad rule, you should consider whether it is worth realising some of your gains to use your £11,100 annual CGT exemption.
Inheritance tax (IHT) – The main IHT nil rate band of £325,000 has been frozen since 6 April 2009 and will remain so until April 2021, making it all the more important that you use your annual IHT exemptions, including the £3,000 annual exemption.
The value of tax reliefs depends on your individual circumstances. Tax laws can change. The Financial Conduct Authority does not regulate tax advice.
The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
The information in this article does not constitute advice and should be used for informational purposes only. This content has been provided to Helm Godfrey by Taxbriefs.