The 5th April, the end of the tax year, is just around the corner. If you’re already prepared, then now is a great time to start planning for the new tax year. But if you’re looking at the calendar and panicking – don’t fret. Here are a few areas to check to ensure you’ve maximised your tax savings for the 2021/22 tax year.
This does not constitute advice and advice should be sought in all instances before acting on it. The Financial Conduct Authority does not regulate tax advice.
Income Tax
- Have you taken all the steps you need to reduce your taxable income in an effort to avoid a higher tax rate?
- Have you and your spouse fully used your personal allowances?
- Can you reallocate investment capital between you and your spouse to reduce tax?
Capital Gains Tax (CGT)
- Because this allowance expires each year, it’s important to maximise your exemption.
- As assets can be transferred between partners, ensure you use the maximum allowance between the two of you where possible.
Inheritance Tax (IHT)
- The annual exemption for IHT can be carried forward for one year only, so check to see if you have any unused portion to use this year.
- Use your IHT-free gifts and continue with the “regular gifts” you’ve already established a pattern for.
Savings and Investments
- Check to see if you’ve used your full personal savings allowances as well as your dividend allowances.
- Closing accounts before the end of the tax year might help you use any surplus savings allowance for the current tax year as the interest can be brought forward.
- Make sure you’ve used as much of your ISA allowance as possible.
Get your taxes sorted
Whether you’re trying to reduce the tax you could be liable for this tax year or want to get a head start on the year ahead, tax planning is an important part of financial planning. A financial adviser can help you make the most of your finances, so get in touch with the experts at Dental & Medical Financial Services to ensure you save as much as you can.