Pre 5-Apr-22 personal tax planning
1st February 2022With the next personal tax year end just around the corner, make sure you use all the allowances and reliefs available to you:
Income Tax
- Consider bringing forward income (salary or dividends) to before 5 April 2022, to avoid the 1¼% increases in NIC and dividend income tax rates.
- Use annual relief for pension contributions. Relief can be carried forward for a limited time but unused relief from 2018/19 must be used by 5 April 2022
- For those wishing to follow a £50k or £100k income strategy, for income tax or high income child benefit purposes:
- Pension contributions can preserve the personal allowance for higher earners.
- Gift aid donations can have the same effect.
- Use your ISA allowances, or lose them. ISAs can shield you from the increase in dividend tax rates, due to take effect on 6 April
Capital Gains Tax
- Consider bed and breakfasting quoted shares (to spouse or ISA) sitting on a paper gain
- Crystallize capital losses? Get the timing right but note that losses on unquoted shares can sometimes be set against income
- Consider investments in a VCT, EIS or SEIS.
Inheritance Tax
- Use your Inheritance tax annual gifts exemption
Whitings “a Brief Guide to”: Pre tax year end planning
Consult your usual Whitings professional for a more in-depth, bespoke tax planning review.
Disclaimer - All information in this post was correct at time of writing.
