Make financial planning your New Year’s resolution

Hatice Cinkaya

Private Client Adviser

As the clock ticks towards the end of the tax year on 5 April, now is the time to look at making pension contributions, maximising ISA allowances, using the Capital Gains Tax annual exempt amount or annual gifting exemptions for Inheritance Tax. Many of your allowances are lost if they are not used before the end of the tax year.

Our tax planning webpage shows the key points and actions you need to consider, along with expert opinions from our advisers to help you make the most of your tax allowances and financial planning opportunities before the end of this tax year.

The Origen Guide to Tax Year Planning also shows some further financial planning ideas to consider.
Contact your adviser or our Client Services Team on 0344 209 3925, so that we can provide financial advice and put your plans in place before the end of the tax year.

Maximise your pension savings – but watch the limits
You can save up to 100% of your earnings in a pension and earn tax relief, so long as you don’t exceed your annual allowance.

Most people can make pension contributions through your employer’s workplace pension scheme, or you can pay into your own pension plan, both of which benefit from tax relief on your contributions.

If you have used all of your annual allowance for this tax year, you can ‘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.

The lifetime allowance for all pension savings, before incurring tax charges, is £1,073,100 and this limit is now frozen until April 2026. If your total pension savings are approaching this level, our advisers can consider whether alternative ways to save for retirement may be more suitable for you, including Venture Capital Trusts, and help you to use your retirement savings most effectively.

ISAs – Saving for you and your family
An Individual Savings Account (ISA) is free from Income Tax and Capital Gains Tax, allowing your savings to provide tax-free income and growth.

Over time, you may have invested in several ISAs – but have you reviewed how they are performing and whether they match the level of investment risk you are willing to take?

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. The Junior ISA allowance can be an excellent way to save for your children’s future.

Generating income from your investments
We can advise on how to release funds from your portfolio tax efficiently. For example, ISA withdrawals are not subject to Income Tax but income from pension savings may be subject to Income Tax. It may be possible for you to take tax free lump sum withdrawals from your pension instead of taxable income.

If you are selling certain investments, including shares, and your gains exceed the annual exempt amount, you will be subject to Capital Gains Tax (CGT). CGT is payable at either 10% for basic rate tax payers or 20% for higher rate taxpayers (with an additional 8% on the sale of properties, other than your main residence, which is generally CGT exempt).

If you are planning to make a sale which will have a gain in excess of the CGT annual exempt amount, you may consider splitting the sale over tax years, so that you use this year’s and next year’s annual exempt amount, thereby reducing the taxable gain.

You also have an annual allowance for dividend payments, but if you receive dividends from shares, you may want to consider holding these assets in tax efficient options, like ISAs or pensions where they are not subject to tax.

Key Allowances to consider

Looking ahead
From April, there will be a 1.25% increase in National Insurance Contributions (NICs) paid by workers, with an additional 1.25% being paid by employers. This will then become a separate tax on earned income from 2023. The impact of rising energy costs and inflation will also see household incomes squeezed, but our advisers are experienced to support and advise you with actions to suit your own circumstances.

Please contact your Origen adviser or our Client Services Team on 0344 209 3925 to talk to us about tax year end actions? please ask us soon so we can take action before the end of this tax year.

Our lines are open 8.30am to 5.30pm, Monday to Friday. Calls are charged at your phone company’s basic rate. All calls are recorded for business purposes.

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.

CA7419 exp 01/2023

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