End of the tax year – Important deadline of April 5, 2025
Your smart guide to the end of the 2024/25 taxation year
As the taxation year is approaching, this is the right time to get the most out of all available tax saving opportunities.
Whether ISA, pensions, investment reliefs or inheritance planning, taking the front can help save you or your long -term customers.
We have considered some strategies below, which can help you conclude your exercise in style.
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Consider your individual savings allowance (ISA) as a case “use it or lose it”. For 2024/25, you can save up to £ 20,000 in tax franchise, but if you do not use it by April 5, you cannot move it forward.
With changes to dividends and capital gains tax, ISA are more precious than ever. In addition, who does not like growth in tax franchise?
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Investment reliefs with EIS, SEIS and VCT
If you are open to a little risk for certain generous tax redilons, the corporate investment program (EIS), the Business Investment Program (SEIS) and the venture capital (VCT) trustee deserve a look. These plans encourage investment in businesses at an early stage with generous tax incentives:
- EIS – 30% income tax relief on a level of 1 million sterling pounds per year, plus the postponement of capital gains (CGT).
- SEIS – 50% income tax relief over £ 200,000, with additional CGT reinvestment.
- VCTS – Dividends in tax franchise and 30% reduction in income tax on investments up to £ 200,000.
Although they can be beneficial, they include higher risks, so we recommend that you obtain professional investment advice before taking measures.
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The annual allowance for retirement contributions in tax franchise is £ 60,000 for the current taxation year. If you have not used your complete compensation for the past three years, you can move it forward until April 5, 2025. However, high wages must be careful – your allowance could be tapered if your income exceeds £ 200,000.
Please note that we recommend that you weigh this against changes in the inheritance tax from April 2027 which could have an impact on your beneficiaries.
If you do not know what is the best savings strategy for you, do not hesitate to contact us.
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Reduce your income tax bill
Do you earn more than £ 100,000? Beware of the tax trap by 60%, as your personal allowance is removed, your effective tax rate increases.
Some potential options on reducing your tax liability include:
- Retirement contributions – Reduce taxable income while saving for the future.
- Gift assistance donations – Reduce your tax bill and make a good cause.
- Dividends and tax allowances of savings – benefit the tax free thresholds.
- Family spouse and tax planning – Realoting Revenue to effectively use the allowances of the two partners.
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If you wish to transmit the wealth in an economical tax in taxation, you could consider some of the strategies below:
- Offer up to £ 3,000 in tax franchise per year – more, smaller gifts of £ 250 per person do not count for the IHT.
- Data for weddings – up to £ 5,000 for a child’s marriage is free.
- Seven -year rule – gifts made seven years before the death of IHT death, provided you survive the full period.
- Fiducies and family investment companies (FICS) – These can be excellent options to explore the structuring of wealth in order to maximize tax efficiency.
Final thought …
The end of the tax year is an excellent opportunity to store your finances, potentially reduce your tax bill and strengthen your savings.
Whether it is a question of maximizing the ISA, making contributions to retirement, optimizing the CGT or planning a tax on successions, a small strategy can now help save money in the future.
We recommend that you ask for advice before implementing one of the above strategies. If you have any questions about the above, do not hesitate to contact us.
