This is the best time to review your finances to reduce the taxman’s take.
Below are some important tax tips that should be considered when you are completing your tax return.
Personal Savings Allowance
Basic rate taxpayers can receive the first £1,000 of interest tax-free, higher rate payers will be able to earn up to £500 tax-free.
If you are a director and you are charging interest on loans made to your companies you can utilise this allowance. Alternatively, look to balance investment portfolios between spouses to utilise this relief for next year.
You can claim £2,000 tax free allowance on dividend income you received.
If timing of dividends can be controlled, ensure that dividends have been declared per shareholder of up to £2,000 before 6 April.
You can make good use of investing in an ISA. There is an annual allowance of £20,000, but this can not be carried forward. Don’t worry if you have not opened one yet as the allowance will remain the same for 2019/20 tax year.
Capital Gains Tax
Capital gains tax exemption has increased to £12,000. Review your investment portfolios and look to realise gains to utilise this exemption.
Married couples can take advantage of two capital gains tax exemptions, by transferring assets between spouses to fully utilise this relief.
If you have an asset which is standing at a loss, consider selling this asset to offset against any capital gains realised in the year.
You can make small gifts each year which are inheritance tax free of up to £3,000, this includes Christmas or birthday presents. If you haven’t used this for the 2018/19 tax year you can carry the allowance over on to the next tax year.
You can also give away assets or money up to the value of £325,000 in the seven years prior to your death to save on Inheritance Tax.
There is also no Inheritance Tax to pay on gifts between spouses or civil partners as long as they live permanently in the UK. You can give them as much as you would like during your lifetime.