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The Financial Group
We simplify all those essential financial decisions
THE EDUCATION SECTION March 2017 The end of the tax year cometh. The tax year ends on Wednesday 5 April 2017 and below we give a little reminder of some things to consider to keep the smile off Hector’s face this tax year. ______________________________________________________________________________________ ISAs Make contribution up to maximum of £15,240 Remember - the allowance cannot be carried forward Pensions Maximise contributions for this year (maximum current Annual Allowance is £40,000) Use carry forward rules (unused allowance from previous 3 tax years) Pay contributions to widen basic rate tax band and reduce tax on capital gains, investment bond gains, etc Consider pension contributions for children and grandchildren Use pension contributions to save Personal Allowances or Child Benefit 3 examples of how making a pension contribution can - o add 25% to the income of a non-taxpayer. Adam stopped working 2 years ago at age 54 & lives on his savings. Click here to see what he should do. o reclaim the Child Allowance for a working family. Gary works and earns £58,00 & Julie doesn’t work. Their 2 children are at secondary school. Click here to see what they should do. o reclaim the Personal Allowance for a high earner. Carol is employed & earns a salary of £120,00 - with a few P11D benefits on top. She is 56 & wants to wind down. Click here to see what she should do. Inheritance tax (IHT) Make use of annual exemption of £3,000 (plus last year’s £3,000 exemption if not used) NOTES Capital Gains Tax (CGT) The annual exempt amount for 2016-17 is £11,100. There are no provisions allowing unused annual exemptions to be carried forward so where possible they should be used - by crystallising gains. Click here to understand more about the rates of CGT, spuse exemption & ‘bed & breakfasting’. Gift Aid Make donations. A donor in a higher tax bracket can claim back the difference between the basic and higher rates of income tax on amount donated As always, please do not hesitate to contact us if you would like further details or information.