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Housekeeping for 2020/21

April 3th 2020 – Written by Jonathan Chorley

Housekeeping for 2020/21

We have experienced an extremely turbulent end to the 2019/20 tax year and last week’s Round Up - All Possible Futures seems like a lifetime ago. Since last week we have seen:

  • NHS Nightingale preparing to open its doors to those Coronavirus patients needing intensive care treatment.
  • The Government writing off NHS Trust historic debt of over £13bn as part of a “major financial reset” for NHS Providers.
  • The Treasury broadening its financial assistance package to Businesses and making support available to the self-employed.
  • The proposed re-opening of talks between Saudi Arabia and Russia to address a deal to cut production – which has given support to oil prices that were at 20 year lows.

In amongst the daily news cycle, we should not forget to look to the forthcoming 2020/21 tax year to maximise tax efficiencies at the earliest opportunity. These tax efficiencies can take a broad form and there are some highlights below –




Points to consider

Income Tax

Marriage Allowance

  • Transfer up to £1,250 of your Personal Allowance to the spouse with a higher income

Personal Savings Allowance (PSA)

  • Allocating taxable savings to spouse or partners in a lower bracket of tax, will increase the Personal Savings Allowance available. I.e. Higher Rate PSA is £500 whereas Basic Rate PSA is £1,000

Dividend Allowance

  • Consider how dividend producing assets are allocated to take advantage of the Dividend allowance of £2,000 per person

Capital Gains Tax (CGT)

Annual Exemption

  • Utilise the CGT Annual Exemption of £12,300 (2020/21) via a Bed & ISA or Bed & SIPP of investments held outside tax efficient wrappers

Tax reduction

  • Where a taxable gain is likely to suffer CGT at the higher rate of 20%, it may be possible to move this gain into basic rate tax by making a personal pension contribution, which will extend the basic rate band by the value of the gross pension contribution

Inheritance Tax (IHT)

Annual Exemption

  • Individuals retain an annual gift exemption of £3,000 which may be rolled over for one tax year if the previous year’s exemption was unused.

Small Gifts Exemption

  • Individuals may make gifts of up to £250 per individual per tax year, provided that recipient does not also receive part of the donor’s Annual Exempt amount

Normal Expenditure

  • Any gift is exempt from IHT if it forms part of the donor’s normal expenditure and leaves the donor with sufficient income to maintain their usual standard of living


We must also not forget the use of Tax-Efficient wrappers –



Points to Consider



  • Funds held within ISAs are not subject to Income Tax or CGT
  • It is also possible to inherit a deceased spouse’s ISA allowance, which is based on the value of the ISA they held at the date of death.  

Junior ISAs (JISAs)


  • This allowance has increased significantly from £4,368.
  • As with standard ISAs, funds within JISAs are not subject to Income Tax or CGT



  • This is the total amount of contributions permissible to a pension in a single tax year, for tax relief purposes. This figure may differ depending on whether you are subject to the Tapered Annual Allowance or the Money Purchase Annual Allowance (MPAA)
  • Ps don’t forget to review previous three years contributions as you may be able to ‘Carry Forward’ the unused allowance.


If you have any queries regarding the above or any strategies that might help you to achieve your goals, please do not hesitate to contact us.

EST. 1999