Top five financial planning steps people should take before tax year end

Tax Year End tips

 
Nick Nesbitt, Partner at Mazars commented: “Tax year end is fast approaching and brings with it a raft of changes. From April, even those making modest income on their investments will face a bigger tax bill due to changes to CGT and dividend tax. With a matter of weeks left, now is the time for individuals to make use of the allowances available to them, and this includes ISA saving.”

Nick Nesbitt shares his five financial planning steps people should take before the tax year ends:
 

Everyone should have an ISA

 
“ISAs are a frequently overlooked part of a savings portfolio. We often speak with clients, with large investment portfolios, who haven’t made use of their full ISA allowance, be that saving for themselves or their family’s future with a Junior ISA.

“If you haven’t used up your maximum allowance yet this year, make sure you top up before 5 April 2024 as your allowance doesn’t roll over to the next tax year.
 

Maximise CGT allowance

 
“Aim to realise gains in unwrapped investment portfolios to make use of your CGT allowance before it is reduced in April and consider realising losses which can be used to offset gains in future tax years.

“You can also consider holding investments jointly (i.e. with spouses/civil partners) so that gains can be offset against two CGT exemptions.
 

Consider investment bond wrappers

 
“The reduction of CGT and halving of the dividend allowance also mean unwrapped investments, including General Investment Accounts, are even less attractive and for some, switching into investment bond wrappers might present more tax-efficiency.
 

Be aware of income tax freezes and pension savings

 
“The freezing of income tax bands will result in many paying more tax, but where affordable, making additional pension contributions can provide tax-relief to offset the increase in tax.

“For workers pushed into the additional rate tax from April 2024, it may be worth deferring contributions until the next tax year to benefit from a higher rate of tax-relief.
 

IHT planning

 
“IHT planning should be a staple of any financial plan with the freezing of IHT nil rate bands a reminder of the importance of estate planning. This includes making use of the £3,000 annual gifting exemption, but also considering larger gifting where this is affordable.

This is especially relevant given the tapering of the residence nil rate band (RNRB). Gifts, which aren’t exempt, remain inside an estate for seven years, but outright gifts immediately reduce the value of an estate for RNRB purposes, potentially providing significant IHT savings.”