Year-End Tax Planning

News

28 March, 2008

With only a few days left until the end of the tax year, here are some things you might like to think about doing before 6 April. This is not by any means comprehensive, but lists some of the more straightforward things you can do.

Income Tax
  • Consider maximising your investment in your ISA;
  • Consider redistributing income-producing assets to other family members if there are lower rates of tax or unused personal allowances available;
  • Pension contributions will attract tax relief at your marginal rate of tax. Since the basic rate of tax is being reduced, a 'net' pension premium paid before 6 April will be worth more than the same premium paid afterwards. Non-taxpayers can contribute up to £3,600 into a pension;
  • Bring forward charitable giving the reduction in the basic rate of tax on 5 April 2008 means that gifts to charities will be worth less in their hands because the tax they can reclaim on your donations will decrease from 22 per cent to 20 per cent.
Inheritance Tax
  • Use the annual and 'small gifts' exemptions and review your will to make sure it is still appropriate.
Capital Gains Tax
  • If you have assets showing chargeable gains, consider making use of your annual allowance (£9,200);
  • Consider transferring assets which are showing gains to your spouse or civil partner.
It is unwise to commit yourself to significant financial transactions or put into effect tax planning strategies without taking appropriate professional advice. Contact the Financial Services team at Forbes for advice on any of these matters.

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