How can you keep you tax bill low ahead of tax year end?

Alistair Crook

Private Client Adviser, Preston

With inflation and living costs continuing to rise, there are some important tax-saving options available to you as we approach the end of this tax year.

Our tax year planning website also provides essential tips and videos to help you make the most of your tax allowances and financial planning opportunities before the end of this tax year.

The value of tax reliefs depends on your individual circumstances. Tax laws can change. The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

ISA allowances – Saving for your future

An Individual Savings Account (ISA) is free from Income Tax and Capital Gains Tax, allowing your savings more potential for tax-free income and growth.

Annual Allowance
Financial planning  – some considerations
· Stocks and Shares ISA

· Cash ISA (available from age 16)

· Innovative Finance ISA available

Lifetime ISA

· Counts towards the annual ISA allowance, but Lifetime ISAs are only available for those aged between 18 and 40.

· Provides a 25% government bonus towards a first property purchase or at retirement.

· You’ll pay a withdrawal charge of 25% if you withdraw cash or assets for any other reason.

Junior ISA
· Children under 18 have an ISA allowance which can hold cash or stocks and shares. The child cannot hold both a Junior ISA and a Child Trust Fund (CTF).

If you have used your own allowance, you can make payments into an ISA for a spouse, civil partner or family member or make contributions into their pension plans. Children under age 18 also have a £9,000 allowance, making ISAs a great way to save for the future.

Don’t miss out on pension savings, but watch the limits

You can contribute up to £40,000 tax-free each year and currently from age 55 you can take up to 25% of your pension tax free. You can make pension contributions through your employer’s workplace pension scheme or into your own pension plan, both of which benefit from tax relief on your contributions.

If you haven’t used all of your annual allowance, it is possible to ‘carry forward’ any unused annual allowances from the three previous tax years so long as you were a member of a pension scheme for those years.

Another factor to consider is the Lifetime Allowance. With the total allowance frozen at £1,073,100, it’s important to make sure you’re not caught by penalty tax charges. If you think you are near or over this limit already, you should consider other tax efficient ways to generate your retirement income?

Annual Allowance
Financial planning – some considerations
Pension savings
· If you are a higher earner or already taking pension income using drawdown, then your Annual Allowance may be reduced.

· The income level where the Annual Allowance starts to reduce has been increased to £200,000, so for some higher earners their Annual Allowance may have increased this year. However, at the top end of the scale, the minimum Annual Allowance has been reduced from £10,000 to £4,000.

· The Lifetime Allowance for all pension savings, before incurring tax charges, increased in line with inflation to £1,073,100.

Maximising returns from investments

Both Capital Gains Tax and the Dividends Tax Allowances will be at least halved from April 2023. Then from 2024/25 the Capital Gains Tax allowance will reduce further to £3,000 and the Dividends Tax Allowance will reduce to £500. Gains realised in excess of the exempt amount are added to income and taxed at 10%, or 20% if they fall into the higher rate (property gains have an 8% surcharge). Have you reviewed your financial plans to ensure you are making the most of your current allowances?

Annual Allowance (2022/23)
Annual Allowance (2023/24)
Financial planning  – some considerations
Capital Gains Tax
· If you have a single sector portfolio that is rebalanced on an ongoing basis, you may be likely to pay annual CGT bills as part of the rebalance. Should you consider moving to multi-asset funds requiring less rebalancing?

· Do you have any embedded gains that should be realised this tax year before the annual exempt amount is reduced?

· Selling assets can be used to provide additional funds to support other income generating investments.

Dividends Tax
· If you receive dividends from shares, above the annual allowance, you may want to consider holding these assets in tax efficient options, like ISAs or pensions.

Inheritance Tax planning

Inheritance Tax, or IHT, is the tax paid on the value of your estate when you die. There are actions you can take during the tax year to ensure more of your wealth is passed on in future.

Annual Allowance Financial planning  – some considerations
Gift money £3,000 (if you didn’t use the allowance in the previous tax year you can carry that forward one year). Gifts can also be made as normal expenditure out of income – but to avoid Inheritance Tax challenges on death, careful gifting plans and records are needed.


If you didn’t use this exemption last year, you can gift up to £6,000 this tax year.

Make lifetime gifts The £325,000 nil rate band and £175,000 residence nil rate band are now frozen until 2028. Lifetime gifts made now will reduce the value of your estate after seven years.

It’s time to take action

We know that 2022 was a challenging year, which makes it even more important to regularly review your financial plans to make sure you are maximising your allowances and tax saving opportunities during the tax year.

Your Origen adviser can discuss with you and suggest any actions you need to put in place and check that your financial plans are on track for the future.


CA9026 Exp 06/23.

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