1. If your taxable income will be £50,000 or more for the current tax year 2019/209, you might consider paying a pension contribution before the end of the year to reduce your exposure to higher rate tax.
2. If you or your partner receive child benefit and you or your partner has taxable income over £50,000, a pension premium could reduce the claw back of the benefit and, in addition, give you higher rate tax relief.
3. Tax savings of 60% can be made where your 2019/20 income is between £100,000 and£125,000 and a pension premium is paid.
4. Gift aid donations have a similar effect on your tax position to pension premiums so make sure you claim gift aid on your tax return.
5. Pension premiums are generally limited to the lower of £40,000 gross or your earnings but remember a contribution of £2,880 can be paid for anyone even if they have no earnings e.g your spouse or child. The pension scheme can then reclaim £720 from the government so that £3,600 would be invested.
6. Have you used your £20,000 Individual Savings Allowance? This can be beneficial if you have stocks and shares paying dividends which would otherwise be taxable at 7.5% at the basic rate or 32.5% at the higher rate and your dividend income is more than £2,000.
7. The capital gains tax annual exemption is £12,000 for 2019/20 and would be lost if you do not use it before the end of the year. Transfers can be made between spouses before sale, making two annual exemptions available.
8. You can give away up to £3,000 a year without any inheritance tax consequences. If you have not used the allowance in the previous year, a gift of £6,000 can be made.
Personal circumstances differ, so if you have any questions or if there is a particular area you are interested in, please get in touch.