A tax year end action plan

A calendar showing 5th April

What action do you need to take before 5 April 2024? This year again, it’s crucial to think about how external factors, such as inflation and reduced or frozen allowances, could impact your finances.

Have you considered whether you will be affected by the reductions to the Capital Gains Tax (CGT) exemption and Dividend Allowance? If so, have you thought about investing up to £20,000 this tax year in a stocks and shares Individual Savings Account (ISA)?

The Dividend Allowance will be reduced from £1,000 to £500 from April 2024. In addition, the annual CGT exemption will fall from £6,000 to £3,000 from April 2024. Dividends received on any shares held within an ISA are tax free and won’t impact your Dividend Allowance. In addition, any profit you make when selling investments in your stocks and shares ISA is free of CGT.

Pension considerations

The Lifetime Allowance for pensions will be abolished from next April. This is good news, but the Annual Allowance remains in place, at £60,000 for most people. Remember you can only get tax relief up to the amount you earn, but if your earnings are less than £3,600 you can pay in up to £2,880 and still get tax relief.

Preparation is key

More and more people are being impacted by stealth tax or fiscal drag and we can’t stress enough the importance of tax year end planning. It remains vital to ensure you are in the best place possible to take advantage of any allowances, exemptions, and reliefs available this fiscal year and to plan ahead. Valuable financial advice remains central to achieving your goals and aspirations.

Approver Quilter Financial Services Limited & Quilter Mortgage Planning Limited. 12/01/2024

The value of pensions and investments and the income they produce can fall as well as rise. You may get back less than you invested.

Tax treatment varies according to individual circumstances and is subject to change.

Taxation advice is not regulated by the Financial Conduct Authority.

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