Courtiers Wealth Management
Courtiers Wealth Management

News & Insights

New tax year incoming (31 days and counting)

By Leo Hallam
6 Mar 2019

Every year, in fact every hour of every day, clocks spin us through annual cycles which seem to accelerate as the years accumulate. Time flies when there are a lot of plates to spin, but being time-poor shouldn’t mean you’re less well-off come April 6th…

The 2019/20 tax year is a month away. This is one annual event worthy of celebration in that it’s good to get it out the way, neatly. In the process it’s worth looking for any potential opportunities to keep the tax bill at a minimum.

Here are some considerations that could help keep your well-invested wealth in your own pocket when the brown envelope lands:

Carrying a gift? Mitigate Inheritance Tax

Gifts totalling £3,000 each tax year are exempt from Inheritance Tax. If unused in one year, the amount rolls on for 12 months and bolts onto your next year’s £3,000 allowance. If you haven’t made any gifts this tax year or during the 2017/18 tax year, you could gift up to £6,000 free of Inheritance Tax before April 6 2019. Useful if your estate’s total value exceeds £650,000 in the 2019/20 tax year. This might sit ultimately as part of a bigger plan, but now’s certainly the time to act if you think there might be some benefit in doing so.

If unused over two tax years, the £3,000 allowance disappears, so consider whether this is something worth utilising over the course of the next month and if we can offer any assistance, please let us know.

Small Gifts up to £250 per person per tax year also fall free of Inheritance Tax and can be made to any number of individuals.

Regular gifts out of excess income can also be deemed exempt from Inheritance Tax (you’ll need clear documentation to prove that gifts are from income rather than capital).

ISAs (Individual Savings Accounts) & Pensions

Anyone aged 18 or over can invest £20,000 tax free into an ISA, offering wealth protection from Income and Capital Gains Tax.

Pension contributions up to £40,000 can qualify for tax relief, depending on your circumstances and level of income. Naturally pensions are a good way of building up a retirement pot for yourself, but also for children and grandchildren as explained in more detail as part of our Bright Futures series.

We’re currently reviewing clients’ portfolios and your Courtiers adviser may be in touch later this week, outlining any ISA or pension contribution opportunities available ahead of the new tax year.

If you’d like guidance and aren’t sure who to speak to about the areas outlined in this article, please contact us.

Tax treatment depends on individual circumstances and may be subject to change in the future.

Warning – the views expressed by Courtiers in this summary and any video and video transcripts, are reached from our own research. Courtiers cannot accept responsibility for any decisions taken as a result of reading this document, watching the featured video or reading the video transcript and investors are recommended to take independent professional advice before effecting transactions. The price of stocks, shares and funds, and the income from them, may fall as well as rise. Past performance is not necessarily a guide to future returns.

We do not endorse nor accept responsibility for the content of any website not operated by Courtiers which you may visit by following a link from this article.

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