It’s the start of a new year and it is the perfect time to take control of your finances.
With prices and interest rates remaining higher than previous years, good money habits and getting a financial plan in place will help you to feel in control of your money and budgeting.
Make the most of your available tax allowances
There are various tax allowances that are available to everyone to help them to minimise the taxes they pay.
For example, you get an annual ISA allowance of £20,000 which you can use to shelter your assets from additional income and capital gains tax. Your ISA can provide you with a tax-efficient income when you need it.
If you’d like to discuss setting up an ISA, you can contact us online or call us on 0117 973 0500.
Every individual also gets a £3,000 per year gifting allowance which they can gift to whoever they choose. This is immediately outside of your estate for inheritance tax purposes. If you have an inheritance tax liability then it is important to try and make use of this every year if you can afford to do so.
How much can I put into my pension and benefit from tax relief?
Every tax year you can contribute £60,000 or 100% of your annual earnings (whichever is lower) to your pension and receive tax relief on your contribution. 20% tax relief is applied automatically. If you are a higher or additional rate tax payer then you will need to claim this back through your annual tax return.
Many people are not aware of the ‘carry forward’ allowance which means you can carry forward any unused pension allowance from the previous three tax years and make one large pension top up while benefiting from tax relief.
To find out how much you could contribute to a pension, you can contact us online or call us on 0117 973 0500.
Making use of your tax allowances helps you to make more of your money. To find out what other tax reliefs and allowances you could be missing out on, you can book a no-obligation meeting with a financial adviser at Four Wealth Management. Book online or call us on 0117 973 0500.
Organise your finances before the tax year end deadline of 5th April 2024
Many of your allowances such as your ISA allowance and gifting allowance will reset on 5th April 2024 and unused allowances will be lost.
Avoid the last-minute tax year end rush and take some time now to review your finances and look at what allowances you could make use of before the 5th April 2024.
Instead of topping up lump sums you could also consider setting up regular contributions to your ISA or pension.
To explore your options and make sure you are making the most of your money, you can contact us online or call us on 0117 973 0500.
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 the amount invested.
The levels and bases of taxation, and reliefs from taxation, can change at any time and are generally dependent on individual circumstances.
