Every year brings new possibilities – and at the start of the 2024/25 tax year, it’s time to maximise your financial options and opportunities. If you’re an investor or saver then there are plenty of tax perks you can take advantage of. But the clock is ticking before the tax year door slams shuts and our team of experts are on hand to ensure that you receive the information you need to make the best decisions for you and your finances.
So, what should my priorities be?
Well, there’s little benefit to having an ISA allowance if you don’t use it to its full potential. The current rules mean you can pay in a maximum of £20,000 across all your ISAs – and you can’t roll over those unused allowances into the next tax year. That allowance applies to cash ISAs, stocks and shares ISAs, lifetime ISAs and innovative finance ISAs – put your money in, and you won’t pay a penny in income tax.
Free cash?
There are cash efficiencies available to you everywhere, you just need to know where to look. Take the lifetime cash ISA as an example. It’s one of the best ways to maximise allowances and bonuses and can be opened by anyone under the age of 40. By contributing up to £4,000 each tax year, the government gives savers a 25% bonus worth £1,000 a year.
A lifetime ISA can only be used for saving towards either your first home (costing up to £450,000) or for retirement. If you withdraw some or all of the cash
before the age of 60 or don’t use it for a first home or retirement, you will have a 25% penalty on the withdrawal amount, so you effectively lose the Government bonus.
Utilise your pension
Are you a higher rate or additional-rate tax payer? If the answer is yes, then you can claim the full amount of pensions tax relief – which could be a further 20% or 25%. It’s not only a tax- efficient way of saving for retirement, it’s also a means of using your pension contributions to bring down your income tax band.
It’s in your hands
Whatever happens in the next tax year, remember that it’s in your hands. And ours too. We’re here to provide you with all the expertise and advice you need to make sound decisions when it comes to one of the few certainties in life. Tax doesn’t have to be taxing.
An ISA is a medium to long term investment, which aims to increase the value of the money you invest for growth or income or both.
The value of your investments and any income from them can fall as well as rise. You may not get back the amount you invested.
HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.
Approved by The Openwork Partnership on 7-5-2024.