As the tax year comes to a close on 5th April 2024, it’s time to ensure you’re making the most of every opportunity to optimise your tax reliefs and allowances. At Castell Wealth Management, we understand the importance of strategic tax planning, especially for individuals, families, and business owners seeking to secure their financial future. Here’s a breakdown of key considerations to help you maximise your tax benefits before the deadline:

Utilise ISA and Junior ISA Allowances

Contributing to Individual Savings Accounts (ISAs) remains one of the most effective ways to grow your wealth tax-efficiently. You can invest up to £20,000 annually into an ISA, with returns shielded from both Income Tax and Capital Gains Tax. Similarly, parents can invest up to £9,000 per year into a Junior ISA (JISA) on behalf of their child, offering tax-free growth for their future.

Leverage Pension Contributions

Pensions not only secure your retirement but also provide immediate tax benefits. Contributions to pensions qualify for Income Tax relief, providing an instant boost to your savings. You have an annual allowance of up to £60,000 or 100% of your eligible earnings, subject to limitations. This includes contributions from yourself, your employer, any other third party as well as tax relief paid into your pension. With this in mind, it’s prudent to maximise your pension contributions before the tax year-end. Additionally, unused allowances from the past three tax years can be utilised, offering further opportunities for tax-efficient investing.

Optimise Capital Gains Tax (CGT) Allowance

Capital Gains Tax (CGT) is levied on the profits generated from the sale or gifting of appreciating assets. Currently, the first £6,000 of your gains are tax-free. However, from the next tax year starting on 6th April 2024, this allowance will reduce to £3,000. Therefore, it’s advisable to capitalise on the higher allowance while available or consider transferring assets into an ISA to shield gains from CGT.

Crafting Your Financial Plan

At Castell Wealth Management, we recognise that achieving long-term financial goals necessitates a comprehensive tax and financial plan. By employing the appropriate financial tools and striking the right balance between savings and investments, you can ensure your money works harder for you. In the face of ongoing financial uncertainty and the freezing of various tax allowances, expert advice becomes invaluable.

Act Now for Tax Efficiency

As the tax year-end approaches, it’s crucial to take proactive steps to optimise your tax position. Whether it involves opening or topping up ISAs, maximising CGT allowances, or bolstering pension contributions, our team is here to guide you through the process. Don’t wait until it's too late – act before the 5th April deadline to capitalise on available tax allowances and secure your future perfect.

Conclusion

In conclusion, smart tax planning plays a pivotal role in realising your financial aspirations. By leveraging tax reliefs and allowances effectively, you can pave the way for a prosperous future while mitigating the impact of tax burdens. At Castell Wealth Management, we’re committed to helping you navigate the complexities of tax planning and investment management. We can help you craft a tailored plan that aligns with your goals and secures your financial wellbeing.

The value of an investment with St. James's Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than you invested.

The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief is generally dependent on individual circumstances.