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Tax Planning Thoughts - February 2019

February 6th 2019 – Written by Jonathan Chorley

As the end of the 2018/19 tax year approaches, the following 'housekeeping' suggestions may improve tax efficiencies and utilise allowances that might otherwise go unused - 

Pension Contributions and Annual Allowance

  • Pension contributions can attract tax relief from 20% to 60%;
  • Carry Forward of previous years unused Annual Allowances means that it may be possible to contribute more than the £40,000 annual allowance;
  • Don't forget that pensions still remain outside of the Estate for Inheritance Tax purposes!

Retirement Planning and the MPAA

  • If you are considering taking pension benefits flexibly, the amount you can contribute to a Pension may reduce to £4,000 per annum as you may be subject to the Money Purchase Annual Allowance;
  • Prior to this there can be opportunities to maximise pension contributions.

ISA Allowance 

  • ISA Allowance is £20,000 and funds within an ISA is free of income tax and capital gains tax; 
  • Contributions may be made to Cash and Stocks & Shares ISAs. 

CGT Allowance 

  • Crystallising capital gains up to the £11,700 limit is very tax efficient;
  • Investing the funds in an ISA or Pension can increase tax efficiency further.  

EST. 1999