Tax Planning Checklist –
Use Before 5th April 2024

As we approach the end of the 2023/24 tax year, it’s crucial to explore avenues for tax savings.

Below are targeted strategies to enhance your tax planning before April 5, 2024.

Remember, consulting a tax professional, such as, is always recommended when making substantial financial decisions.

(Read Time: Approx. 11 minutes)

Topics Discussed:

  • Maximising tax reliefs and allowances to lower your tax bill.
  • Strategies for utilising specific tax benefits before the tax year end.

Capital Gains Tax (CGT) Planning

Evaluate your investment portfolio to leverage the CGT exemption effectively.

The exemption amount is £6,000, which is pivotal because unused exemptions cannot be rolled over to the next year.

Given the impending reduction to £3,000 starting 6 April 2024 maximising this year’s allowance is more important than ever.

Marital Strategy for CGT Exemption

For those married or in civil partnerships, you have a unique opportunity to double your CGT exemption, thanks to the ability to transfer assets between spouses without triggering a gain or loss.

Prioritising asset transfers before any sale can ensure both partners’ exemptions are fully utilised.

Dealing with Loss-making Investments

If you’re holding assets that have depreciated, selling them could counterbalance any capital gains you’ve realised throughout the year.

However, if you aim to repurchase any sold shares due to their potential long-term value, be wary of the CGT matching rules.

Direct repurchasing within 30 days does not allow you to recognise the loss.

Techniques such as ‘bed and spouse,’ ‘bed and SIPP,’ or ‘bed and ISA’ are workarounds to navigate this restriction, enabling the repurchase of shares in a tax-efficient manner.

Pension Contributions

The 2023/24 tax year introduces an opportunity for individuals to enhance their pension savings through increased annual allowances and favourable tax treatments.

With a £60,000 annual pension allowance—a significant rise from the previous £40,000—maximising this opportunity can substantially benefit your retirement planning.

Annual Pension Allowance and Carry Forward Rules

  • Annual Allowance for 2023/24: Individuals can contribute up to £60,000 to their pension this tax year, with these contributions eligible for tax relief. This increased limit from the previous year underscores the importance of reassessing your pension contributions to take full advantage of the tax relief available.
  • Carry Forward Allowance: Don’t forget the carry forward rules that permit the use of unused annual allowances from the past three tax years, provided you were enrolled in a pension scheme during those years. This feature is especially beneficial for catching up on missed contributions, enhancing your pension pot while optimising tax relief.

Considerations for Personal Contributions

Personal contributions are capped at the higher of £3,600 (gross) or 100% of your relevant UK earnings, excluding rental income.

This limit emphasises the importance of aligning contributions with your financial capacity and earnings to maximise benefits.

Contributions for family members, such as children or grandchildren, can also be a tax-efficient strategy, with the possibility of contributing £2,880 net (£3,600 gross) for each, further extending your tax planning to the next generation.

Restrictions and Opportunities for High Earners

High earners, particularly those with an adjusted income exceeding £260,000, face a tapering of the annual allowance.

The allowance decreases by £1 for every £2 of income over this threshold, with a minimum allowance of £10,000 for incomes above £360,000.

Understanding these limits is crucial for high earners to navigate contributions effectively without incurring unexpected tax liabilities.

Despite these restrictions, the abolition of the Lifetime Allowance charge from 6 April 2023 presents a significant change, removing the ceiling on tax-efficient pension savings and eliminating additional tax charges on pension benefits taken post this date.

However, the limit still influences the tax-free lump sum withdrawal, which remains at the lower of 25% of the Lifetime Allowance amount or the value of the pension fund.

Pensions and Inheritance Tax (IHT) Implications

Pensions offer a unique advantage in estate planning, being exempt from IHT.

For scheme members passing away before age 75, beneficiaries can access the pension funds tax-free, offering a strategic avenue for passing wealth to the next generation.

Should a scheme member die after age 75, beneficiaries will be taxed at their marginal rates when drawing funds.

This highlights the importance of considering pension savings in the broader context of estate and tax planning, especially for those contemplating how to best support beneficiaries.

With a generous £20,000 allowance per individual for the 2023/24 tax year, understanding how to fully leverage ISAs can significantly impact your financial planning.

Annual ISA Allowance

  • £20,000 Limit: This can be allocated across cash and shares ISAs according to your preference. Remember, this allowance doesn’t roll over; if you don’t use it, you lose it. This urgency underscores the importance of utilising your ISA allowance each year.
  • Long-term Growth: While the immediate tax savings on £20,000 might seem modest, the real value of ISAs is realised over time. Consistent annual contributions can accumulate into a substantial tax-free pot, emphasising the power of compound growth and tax efficiency.

Diverse ISA Options

Lifetime ISA (LISA)

Available to individuals aged 18 to 39, the LISA supports first-time home purchases or retirement savings with a government bonus of 25% up to a £4,000 annual contribution.

Withdrawals are penalty-free for first-time home purchases or after age 60, ensuring that LISAs serve specific financial milestones effectively.

Innovative Finance ISA (IFISA)

The IFISA introduces the potential for higher returns through peer-to-peer lending or crowdfunding platforms within the overarching £20,000 ISA limit, diversifying investment opportunities.

Junior ISA (JISA)

With a £9,000 annual cap, JISAs facilitate tax-free savings for those under 18, transitioning to a regular ISA upon reaching adulthood.

This option offers a foundation for future financial independence, be it for education or homeownership.

Flexible and Inheritance ISAs

Flexible ISAs allow for withdrawals and subsequent replacements within the same tax year, maintaining your annual allowance intact.

In contrast, Inheritance ISAs enable a surviving spouse or civil partner to inherit an ISA allowance, preserving its tax-efficient status beyond the account holder’s life.

Tax-Efficient Investments

Investment in smaller, growing companies is increasingly popular, driven by significant tax incentives and the desire to support innovation and entrepreneurship.

Here’s how you can leverage these opportunities:

Enterprise Investment Scheme (EIS)

  • Tax Relief: Investors can claim up to 30% income tax relief on investments up to £1m per tax year, with the option to carry back relief to the previous year.
  • Capital Gains Deferral: Capital gains on other assets can be deferred when reinvested into qualifying EIS shares.
  • Tax-Free Growth: No capital gains tax is due on the disposal of shares held for over three years, assuming income tax relief was claimed at the investment time.
  • Loss Relief: If the investment fails, you can offset the net loss against your income or capital gains tax.
  • Inheritance Tax Relief: EIS investments are exempt from inheritance tax after two years of holding.

Seed Enterprise Investment Scheme (SEIS)

  • Enhanced Tax Relief: Reflecting the higher risk, SEIS offers up to 50% income tax relief on investments up to £200,000 per tax year.
  • Capital Gains Reinvestment Relief: Up to 50% of the reinvested gain is exempt from capital gains tax in the year income tax relief is claimed.
  • Similar Benefits to EIS: Tax-free growth, loss relief, and inheritance tax relief mirror those offered by EIS.

Venture Capital Trusts (VCTs)

  • Income Tax Relief: Investing in newly issued VCT shares offers up to 30% income tax relief on investments up to £200k, translating to potential savings of up to £60k against your income tax liability.
  • Tax-Free Dividends and Growth: Dividends from VCTs are tax-free, and there’s no capital gains tax on disposal, provided the shares are held for at least five years.

Considerations and Planning

While the tax advantages are significant, investment decisions should be based on the investment’s merits, not solely on tax benefits.

These schemes are designed to support riskier investments in smaller, unlisted companies, so a thorough assessment of the potential risks and rewards is crucial.

Taxes on your Income

For individuals earning over £100,000, the gradual loss of the personal allowance—effectively creating a ‘tax trap’ with marginal rates as high as 60% between £100,001 and £125,140—demands strategic tax planning.

Utilising Pension Contributions

Contributing to your pension can effectively reduce your taxable income, potentially bringing it below the threshold where the personal allowance begins to taper off.

Be mindful of the annual allowance and the possibility of carrying forward unused allowances from the past three tax years.

Charitable Donations

Donations made under Gift Aid can extend your basic rate tax band and reduce your overall tax liability, especially beneficial for those caught in the high-income tax trap.

Tax-Efficient Investments

Investing in schemes like EIS, SEIS, or VCTs can offer tax reliefs that lower your taxable income, aligning with strategies to mitigate the loss of the personal allowance.

Managing Dividend Payments

If you control dividend timing, consider accelerating payments to make full use of the current £1,000 tax-free dividend allowance before it reduces to £500 from April 6, 2024.

Maximising Savings and Dividend Allowances

Personal Savings Allowance (PSA)

Since April 2016, most savings interest is paid gross, with a tax-free allowance of £1,000 for basic rate taxpayers and £500 for higher rate taxpayers.

Additional rate taxpayers do not receive this benefit.

Starting Rate Band for Savings

This allows up to £5,000 of interest income to be received tax-free, on top of the personal allowance and PSA, if the first “section” of income over the personal allowance is formed of income from any interest you earn.

This can be particularly advantageous for those with lower income from other sources.

Dividend Allowance

With the dividend allowance set at £1,000 for the current tax year, reducing to £500 from April 2024, strategic timing of dividend distributions can optimise tax savings.

Couples should consider investment reorganisation to utilise each partner’s allowances fully.

Considerations and Action Steps

Engaging in these strategies requires careful consideration of your overall financial situation and objectives.

Balancing income generation with tax efficiency can significantly impact your net income and long-term financial health.

Inheritance Tax (IHT) Planning

Effective estate planning can substantially mitigate the impact of IHT, leveraging allowances and reliefs to safeguard your assets for future generations.

Absolute Lifetime Gifts

Gifts made more than seven years before death fall outside the IHT scope, with any subsequent growth on these gifts also exempt.

The taper relief applies to gifts made within seven years of death, reducing the IHT rate progressively from the third year onward.

This highlights the benefits of early gifting, particularly using cash to avoid Capital Gains Tax (CGT) implications.

Annual and Special Circumstances Gifts

Annually, you can gift up to £3,000 IHT-free, alongside smaller £250 gifts to any number of individuals and special occasion gifts, such as £5,000 for a child’s marriage.

Utilising these allowances annually can steadily decrease your taxable estate.

Regular Gifts from Income

Regularly gifting from your excess income can further reduce your estate’s value for IHT purposes.

These gifts must form part of your normal expenditure and leave you with sufficient income to maintain your usual lifestyle.

The Family Home and Residence Nil Rate Band

The residence nil rate band offers an additional £175,000 allowance when passing a UK residence to direct descendants.

This allowance is tapered for estates over £2 million but can significantly increase the portion of your estate that can be passed on tax-free.

Trusts and Family Investment Companies


Trusts offer a versatile solution for estate planning, allowing control over assets while potentially reducing IHT liability.

Contributions up to the nil rate band (£325,000 for 2023/24) every seven years are exempt from IHT.

Assets qualifying for Business Relief, such as shares in unlisted companies or AIM-listed companies, can further enhance the effectiveness of trusts in estate planning.

Family Investment Companies (FICs)

FICs provide a structured approach to managing family wealth, offering control, tax efficiency, and potential for growth outside of your estate.

Structured correctly, FICs can facilitate wealth transfer and provide financial support during retirement without immediate IHT consequences.

The Critical Role of Wills in Estate Planning

A comprehensive and up-to-date will is foundational to any estate plan, ensuring your assets are distributed according to your wishes.

It should address guardianship for minors, provide for your family’s needs, and incorporate flexibility to adapt to changes in circumstances or legislation.

Action Steps and Considerations

Given the complexities of IHT planning, early action, and regular review of your estate plan is crucial.

Leveraging gifting allowances, trusts, and other estate planning tools can significantly reduce your IHT exposure.

Engage Professional Advice

Estate planning is highly individualised, with legal, tax, and family considerations. Engaging with tax professionals, such as ourselves here at, can provide tailored advice and ensure your plan aligns with your goals and current legislation.

Your proactive steps today can lead to significant savings tomorrow.

Contact us today at 01772 788200 to find out more about how we can help, or WhatsApp us out-of-hours at 07787 010190.

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Kind regards,

Ilyas Patel