Here are some quick “hits” on how to reduce the amount of tax you are assessed on.
1. Switch To Tax-Free Savings
If the interest you receive from savings in your standard savings account is more than the new personal savings allowance (£1,000 for basic rate taxpayers, £500 for higher rate taxpayers), you should consider transferring your money into tax-free investment accounts such as Individual Savings Account (ISA).
2. Make Donations To Charity
You can make cash donation to charity or give them anything you own. This will not be counted as part of your estate when you die. Therefore, this could cut or even eliminate Inheritance Tax that may become payable upon death.
You can also make donations through Gift Aid. This can reduce your taxable net income and therefore reduce your tax liability.
3. Transfer Assets To Your Spouse
If your husband, wife or civil partner is a non-taxpayer or pays basic-rate tax, it could be worth transferring income-producing assets such as savings or rental properties into their name. This is to enable each spouse to fully utilise the various tax exemptions available to an individual.
4. Top Up Your Pension
If you’ve decided to work past retirement age and haven’t started drawing a personal or company pension, making payments into a pension scheme should reduce your taxable net income.
5. Switch To Capital Growth-Generating Investments
You should consider switching your investments from dividend generating income into growth-generating income instead. Through this way, you’ll be able to reduce your taxable dividend income and make use of the 2018/19 tax free Capital Gains allowance of £11,700 when you cash in your investment.