With the ‘B’ word looming and a newcomer, the ‘H’ word looking set to impact on the local economy over the next few years, some might be wondering whether it is the end of the world. Times are uncertain for many business and individuals across the region and I hope for all of us, that there is some better news coming around the corner.
But no, I am talking about 5 April and another tax year drawing to a close prompting the final review of income, allowances and tax reliefs which may be available before the deadline passes. So, I thought it a good time to set out a few general planning exercises you may wish to consider.
Is your spouse making full use of their personal allowance? If not, then consider the transferable marriage allowance.
The first £2,000 of dividend income received by an individual in 2018/19 is tax-free. If you run your own limited company and have not drawn any dividends this year, you may wish to consider doing so.
Pension contributions can be used to reduce higher rate tax liabilities, but in order to be effective in 2018/19, these contributions must be received and credited to you pension fund no later than 5 April – delays can occur if payments are made by cheque – these must have cleared before the end of the tax year. Watch out for the annual and lifetime allowances also.
Have you considered using your £3,000 annual exemption on gifts for Inheritance Tax purposes?
If you are planning to make a capital disposal, such as a disposal of shares, could you time this so as to utilise this year £11,700 capital gains tax exemption? If there is any capital gains tax due, could it qualify for entrepreneur’s relief or could the gain be deferred? Could you sell part of the investment now and part in future years?
Have you considered whether to put any funds into a tax free ISA?
As always, I strongly recommend speaking to your financial adviser and/or tax adviser for tailored advice specific to your circumstances, but don’t leave it too late or there might not be time to take full advantage.
This article originally appeared in the April/May edition of Wiltshire Business.