As we approach the end of the tax year, it is an ideal time to review your financial affairs and consider making full use of all the available allowances and tax reliefs in order to minimise higher and additional rate tax liabilities in the current tax year.
Remember to consider:
- Pension contributions – with income tax relief, at your highest marginal rate, on contributions up to £40,000 per annum until 5 April 2015. There is also scope to utilise carry forward allowances which may allow a much larger contribution to be made.
- Additional flexibility is being given to pensions from April 2015 meaning it is crucial that anyone planning for, approaching, or already in retirement seeks advice.
- ISA allowances for tax efficient income and tax free gains – up to £15,000 can be invested per person in 2014/15.
- Capital gains tax allowances – it is possible to realise gains up to £11,000 in tax year 2014/15 without being subject to tax.
- Venture Capital Trusts – up to £200,000 can be invested each tax year, providing 30% income tax relief and tax free dividends.
- Enterprise Investment Schemes – with income tax relief at 30% on investments up to £1m, these can be used to defer a capital gains tax liability, and qualify for business property relief to become potentially inheritance tax free after 2 years. A disposal of EIS shares can also be exempt from capital gains tax, provided certain conditions are met.
- This tax year represents the last opportunity to invest in renewable energy, which benefits from government underpinned income streams, and gains EIS tax relief on the investment.
For further information please contact your usual Moore Stephens adviser.
Private client tax team
Business tax team