» » » What to do before the tax year ends - Only days to go

What to do before the tax year ends - Only days to go

Economy:
What to do before the tax year ends - Only days to go

BRITONS across the nation are getting their finances in order before the end of the tax year. But what do you need to do?

The 2015/16 tax year ends at midnight on Tuesday April 5. Here is everything you need to do before the deadline.

Use your ISA allowance

Savers should add to their tax-free individual savings accounts (ISAs) before their annual allowance expires at the end of the tax year.

The ISA allowance of & pound; 15240 is the maximum amount that can be saved in cash ISAs, stocks and shares ISAs or a combination of the two.

People who miss the deadline will lose their unused allowance as part of a 'use it or lose it policy'.

What to do before the tax year ends - Only days to go

Maximise your pension contributions

Every year people can put up to & pound; 40000 in their pension pot before starting to pay tax on the savings.

Pension contributions therefore offer tax savings, particularly for higher-rate taxpayers.

Savers can top up their allowance for the current tax year with any unused allowances from the previous three years.

What to do before the tax year ends - Only days to go

Minimise your inheritance tax bill

Britons can make gifts of up to & pound; 3000 every tax year to avoid inheritance tax further down the line.

The annual gift allows allows parents to give money to their children without worrying about inheritance tax.

If you have not used last year's allowance you can carry it forward for one year.

Use your child's ISA allowance

Parents can open tax-free Junior ISA accounts for their children to make the most of their ISA allowances.

The Junior ISA limit is & pound; 4080. The money can be invested in cash ISAs and stocks and share ISAs.

Children can take control of the account when they turn 16 but they can not withdraw the money until they turn 18.

Use your Capital Gains Tax exemption

The annual tax-free allowance, known as the Annual Exempt Amount, allows people to make a certain amount of capital gains before they must pay tax.

Investors only pay Capital Gains Tax if their overall gains for the tax year exceed this amount. The allowance is & pound; 11100 for the 2015/16 tax year.

Related articles


Why you should not ignore this year's Isa
Homeowners can now earn £ 7500 tax free when renting out spare room
Deadline looms for a tax-free Isa treat
Views
390
01 April 2016, 22:00