1. Pension contributions – spouses and children
Consider contributing up to £2,880 towards a pension for your non-earning spouse or children. The government will gross this up to £3,660 for free.
Contribute to your ISA. The allowance for 2018/19 is £20,000, whilst the Junior ISA allowance is now £4,260 for children under 18. Also, if eligible you can also contribute up to £4,000 to a Lifetime ISA, although penalties apply for early withdrawal.
3. Capital gains
Use the Capital Gains Annual Exemption of £11,700 to realise gains tax-free. The allowance cannot be transferred between spouses or carried forward.
4. Pensions contributions – maximising amounts and tax relief
Maximise pension contributions by utilising the Annual Allowance which is £40,000 (tapered if you earn over £150,000). Unused Annual Allowances may also be carried forward from the previous three tax years.
5. Remuneration strategy
If you run your own company, it’s a good idea to determine your pay and benefits strategy early in the tax year. For 2018/19, the dividend nil rate band is reduced from £5,000 to only £2,000 – do consider the tax implications of your chosen approach to salary, benefits, pensions and dividends. Talk to us if you need help.
Make use of the IHT Annual Exemption to make gifts of £3,000. If unused, the exemption can be carried forward one year.
7. Transfer income producing assets
Consider transferring income producing assets between spouses/ civil partners, to use the income tax personal allowance and lower income tax bands of the transferee.
8. File your Self-Assessment Return early.
If you might be due a repayment, filing early could mean that you get your refund earlier. Filing early also limits the window during which HMRC may raise an enquiry into your return.
9. Overpayment and capital loss claims
Submit claims for overpaid tax and capital loss claims for the 2014/15 year before 5 April 2019, after which such claims will be time-barred.
For 2018/19, the restriction on deductibility of mortgage interest and other finance costs doubles from 25% to 50%. If you plan to take steps to mitigate the impact, such as incorporation for example, you may save more tax by taking those steps earlier on in the year. In future years, the restriction will apply to 75% and then, from April 2020, 100% of finance costs incurred by individual landlords – so the impact will increase as time goes on.