Making the most of the current tax year allowances

With the end of the current tax year, the 5th April 2023, just around the corner, it’s important to consider taking advantage of the tax benefits available whilst you can. There is just over 6 weeks until the new tax year begins, so it’s worth checking to make sure you have utilised all the allowances that you can.
ISA Allowances
An Individual Savings Account (ISA) is a scheme which allows you to save in a tax efficient manner. They are free of income, dividend and capital gains tax. You can save up to £20,000 per tax year in an Individual Savings account and can be split between a cash ISA (receives interest) and a Stocks & Shares ISA, where your money is invested.
You can save up to £20,000 each year in an ISA, £9,000 for a Junior ISA each tax year and £4,000 into a Lifetime ISA.
Pension Contributions
The maximum you can save each year into a Pension is 100% of your relevant UK earnings to get tax relief on your contributions (up to the annual allowance of £40,000 for the 2022/2023 tax year) *Figure may be lower for individuals with higher earnings subject to taper relief or for those subject to the Money Purchase Annual Allowance (MPAA)
An individual can contribute up to £3,600 a year without any earnings, which means you can contribute on behalf of a spouse, a child or grandchild should you wish to do so.
Capital Gains Allowance
The Capital Gains Tax allowance is currently £12,300 in the 2022/2023 Tax Year but will be reducing to £6,000 per annum from the 6th April 2023.
Marriage Allowance Transfer
If you, and your husband, wife or civil partner is a non-tax payer and the other is a basic rate tax payer you can utilise the non-tax payers personal allowance and transfer £1,260 (for the current 2022/23 tax year) to the spouse who pays basic rate tax, reducing their bill by £252 per year. Once set up if will be done automatically each tax year, until you advise HMRC differently and can be backdated for any tax year since April 2018.
This blog is not intended to replace independent financial advice, if in doubt, please contact us.