Best Finance Tips Before The End Of The Tax Year
When it gets to the end of the financial year, we all want to be able to save as much money as possible. Maximising your savings is elemental to financial success. Follow these top tips and you should find you are able to generate surplus savings that will increase, year on year.
Save Up For Your Children
You can pay into a JISA on behalf of your child up to age 18, but your child can take control of the account at 16. If you have children or grandchildren, the Junior Individual Savings Account (JISA) is worthy of consideration. Contributions are limited to £4,260 per tax year, but it has the same tax benefits as an adult ISA. No withdrawals are allowed before 18, however. Again, if you don’t use the full JISA allowance in the tax year, the remainder does not roll over and will be lost. The better JISA providers will allow multiple contributors, so it’s a great way for grandparents to help out.
Utilise your Capital Gains Tax allowance
The Annual Exempt Amount is where you don’t have to pay Capital Gains Tax on the sale profits from qualifying assets. If your overall profit, or gain, is above this amount in a tax year, CGT will be due. A further consideration is that jointly owned assets can now use both of your allowances should you sell and make a profit, but the exception does not roll over from year to year. So, if you’re planning to sell a valuable qualifying asset and have already used the majority of your AEA, it might be worth delaying the sale. If you are look for extra income, you can always take out instant cash loans as a means of an influx of cash into your bank account.
Always Look After Your Pension Allowance
There are limits to the amount you can tax-efficiently pay into your pension. Known as the Annual Allowance, it’s currently set at the equivalent of your relevant taxable income that year, up to a maximum of £40,000. However, for high earners, the Annual Allowance may be as low as £10,000. If you’re unsure if you’re making the most of your available allowance, seek financial guidance in this respect.
There is one saving grace known as Carry Forward, where your unused Annual Allowance can be rolled over from the previous three years. If you think you might qualify for Carry Forward and have the means to maximise your pension contribution, don’t hesitate to seek financial advise in this area. A pension scheme, especially since legislation changed back in 2015 making them much more flexible from age 55 onwards, is an excellent way to plan for retirement.
Take Dividends
The Dividend Allowance lets investors and shareholders receive £2,000 of dividends free of Income Tax. Originally introduced some years ago, the limit has been reduced from £5,000 to its current level, so it would be wise to make use of the allowance whilst it is available.
Making use of all these various aspects will allow you to save money before the tax year ends.
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