The overall ISA allowance for 2015/2016 is £15,240. If you have not fully utilised your allowance in the current tax year, this needs to be undertaken before 5 April 2016 or the allowance for the current year will be lost.
Subject to qualifying conditions being met, these can provide income tax relief at 30% or 50% and, if made before 5 April 2016, there is an opportunity to carry back the income tax relief to the previous year.
If you do not use the annual exemption by 5 April 2016, it will be lost.
If you have gains over the annual exemption of £11,100, it might be useful to defer the excess until after 5 April in order to use the following year's annual exemption.
In addition, the rates of capital gains tax are reducing after 5 April 2016 for gains on certain assets and it may be worth deferring any gains until after 5 April 2016 to obtain the reduced capital gains tax rates (if applicable).
There are a number of considerations here including:
Further longer term planning in terms of pension contributions will include:
Although pensions are long term planning arrangements, the whole of your pension fund can be accessed when you reach 55 years old and this is therefore becoming an appealing tax planning tool.
With the new rates and allowances announced for 2016/2017, there is an opportunity to receive income of up to £22,000 a year tax free by using the following:
This can be achieved for basic rate tax payers at certain levels of income – on the basis that you achieve the right mix of earnings, dividends, income and savings.
If you want to discuss any of the above, please contact your local Perrys branch.
Article written by Declan McCusker
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