As the end of the tax year approaches (5th April), it’s time to take a proactive approach to managing your finances and simplify your tax year. With the ever-changing landscape of tax regulations, it’s crucial to stay informed and plan ahead to optimise your financial position.

In this article, we’ll explore seven simple and effective strategies to help you make the most of your tax allowances before the end of this tax year and prepare for the year ahead.

1. Utilise Your Capital Gains Tax Allowance

The annual Capital Gains Tax (CGT) allowance has undergone significant reductions in recent years. After being reduced from £12,300 to £6,000 in the 2023/24 tax year, it has now dropped to £3,000 for 2024/25. This means careful planning is more important than ever.

Take time to review your investment portfolio and consider realising gains up to the £3,000 limit before the tax year ends. By doing this strategically, you can minimise tax liabilities and potentially optimise your investment returns.

2. Maximise Your ISA Allowance

ISAs (Individual Savings Accounts) remain a cornerstone of tax-efficient saving and investing. The annual ISA allowance for 2024/25 is unchanged at £20,000.

With further reductions in both the capital gains tax and dividend tax-free allowances (now only £500 for the latter), ISAs are increasingly valuable. Contributing to a Cash ISA or Stocks and Shares ISA before the end of the tax year can shield your savings and investments from these liabilities, allowing for tax-free growth.

3. Boost Your Pension Contributions

Pensions continue to offer significant tax relief and benefits for retirement planning. For 2024/25, the annual pension allowance remains at £60,000, with the Lifetime Allowance abolished.

Maximising your pension contributions before 5th April can reduce your taxable income for the year. Higher and additional rate taxpayers can particularly benefit from generous tax relief, making this a powerful tool to build retirement wealth while minimising your tax burden.

4. Make the Most of Marriage Allowance

For married couples or civil partners, the Marriage Allowance allows a partner to transfer up to £1,260 of their unused personal allowance. (It can be from a lower-earning tax payer to a higher-earning tax payer, or a non tax payer to a basic tax payer, or a basic rate tax payer to another basic rate tax payer)

For example you may be eligible if one partner earns below £12,570 and the other earns under £50,270. This can reduce your tax bill by up to £252 annually and can be backdated by up to 4 years to reclaim past allowances.

For details and eligibility, visit the UK Government’s website.

5. Consider Gift Aid Donations

Donating to charity through Gift Aid not only benefits the causes you care about but can also reduce your tax liability. For every £1 donated by a tax payer, charities can reclaim 25p, and higher or additional rate taxpayers can claim back the difference between their tax rate and the basic rate.

By making donations before the tax year ends, you can support your community while optimising your tax position.

6. Save for Your Child’s Future with Junior ISAs

For parents, Junior ISAs are a tax-efficient way to save for your child’s future. The annual contribution limit for 2024/25 remains £9,000.

Contributing to a Junior ISA provides tax-free growth on investments, giving your child a financial head start for education, travel, or other future endeavours.

7. Explore Inheritance Tax (IHT) Gifting Allowances

Inheritance Tax planning is crucial for preserving wealth across generations. The annual gift exemption remains £3,000, allowing you to pass on assets without impacting your estate’s taxable value. Unused exemptions from the previous tax year can also be carried forward.

Additional allowances include:

• Wedding or civil partnership gifts of up to £5,000 for a child, £2,500 for a grandchild, or £1,000 for others.
• Small gifts up to £250 per person, with no limit on the number of recipients (as long as they haven’t received any other exempt gifts).

💡 Why this matters more than ever:

The UK government has signalled potential changes that could bring some pensions into the taxable estate upon death. While the details are still under discussion, this could significantly impact inheritance tax planning in the future.

This makes using your annual gift exemptions and other allowances now even more important to reduce the value of your estate.

At Ovation, we’re monitoring these developments closely to ensure our clients stay ahead of the curve. Speak to your financial planner if you’re concerned about how these changes may affect your legacy planning.

Contact Ovation to Help Simplify Your Tax Year

The end of the tax year presents an opportunity to review your finances and take full advantage of available tax allowances and reliefs. However, navigating tax regulations can be complex, which is why having a trusted financial planner is invaluable.

At Ovation Finance, we can help you stay on top of changing regulations, optimise your tax strategies, and ensure you’re making the most of your opportunities.

📞 Call us on 0117 942 4333 or fill out fill out our online form to get started.

Simplify your tax year and set yourself up for financial success in the year ahead.

Key Changes/Introductions for 2024/25

• Capital Gains Tax allowance: Reduced to £3,000.
• Dividend tax allowance: Reduced to £500.
• ISA and Junior ISA limits: Unchanged at £20,000 and £9,000, respectively.
• Pension Annual Allowance: £60,000, with no Lifetime Allowance limit.

The information contained within this article is not individual financial advice and for information only. It is based on our understanding of legislation, whether proposed or in force, and market practice at the time of writing. Levels, bases and reliefs from taxation may be subject to change.

Ovation Finance Ltd is authorised and regulated by the Financial Conduct Authority. You can find Ovation Finance Ltd on the FCA register by clicking here. Reference number: 190914. The Financial Conduct Authority does not regulate tax and estate planning.