Act now! end of tax year…
Making the most for the end of this tax year 2017
We are now in the final run up to tax year end and below are a few areas if you’re looking at this for your personal finances to consider
Capital gains tax
You have up to £11,100 (current rate) available tax free, every tax year. Have a think how you might be able to use some or all of this. If not used by 5th April you will lose it for the tax period 2016/17.
Using your ISA limits
From April 2017, the contribution limit for a standard ISA will increase to £20,000 a year and the limit for Junior ISAs will be £4,128.
For this current tax year by 5th April you can make ISA contributions of up to £15,240.
Lifetime ISA opportunity
The Lifetime ISA will soon be available to people aged 18 to 40. You will be able to save up to £4,000 each tax year and the Government will add a 25% bonus. This is a much discussed area that has received both positive and some negative commentary for various reasons.
For first-time buyers this could be a very good thing, with the state adding 25% on top of what you save.
Be careful though that you don’t compromise your workplace pension where the employer makes a contribution on top if you’re deciding which one to do/if you can only afford one at the mo!
£1,500 pension advice allowance gift
Those under 55 with a money purchase (defined contribution) pension can take £500 tax free on 3 occasions (only once in any tax year) from your pension for pension and retirement advice.
Money Purchase annual allowance danger
The Money Purchase Annual Allowance (MPAA) from 6th April is due to be reduced from £10,000 to £4,000. This is aimed at individuals who have already accessed their pension and is looking to prevent the recycling of this back into your pension to receive further tax relief.
Protecting your pension provision
For those in Final Salary (defined benefit) schemes with long term and high value many may not realise how close they are to certain limits. If your assets were worth more than £1.25 million at 5th April 2014, then you still have a window before the new tax year deadline for applying for Individual Protection 2014 (IP14). So check and protect your pension from the Lifetime Allowance (which hits when your pension assets reach £1 million).
Topping up your state pension
If you reached state pension age before 6th April 2016 (male born before 6 April 1951 or a female born before 6 April 1953), 5th April is the deadline for making voluntary contributions to top it up.
You can apply to make a lump sum payment by 5 April 2017 this via the gov.uk website.
Carry forward any unused allowance
From this 6th April, the amount you can carry forward will change. This is the last tax year that you will be able to carry forward any unused annual allowance from tax period 2013/14 when it will drop from £50,000 to £40,000. So use this up if you can and are eligible.
A few things to ponder or take action on before the new tax year arrives…