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February 2020

Make your money work harder

Is your money ready for tax year end?

It’s always here before you know it – the new tax year starts on 6 April. But between now and then, there are still a few things you can do to make the most of your money this year.

The value of investments can go down as well as up, your capital is at risk. Tax reliefs referred to are those applying under current legislation, which may change. The availability and value of any tax reliefs will depend on your individual circumstances.

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Maximise your ISA allowance

ISAs are tax-efficient as they are free of UK income tax and capital gains tax. The 2019-20 tax year ISA allowance is £20,000, and that’s on top of your personal savings allowance. It’s a case of ‘use it or lose it’ with your annual ISA allowance though – there’s no way of carrying it over. So make sure you’ve taken advantage of your allowance before 6th April.

Junior ISAs are tax-free savings accounts which under-18s can save or invest up to £4,368 in this tax year (2019/20). Just like an adult ISA, any returns made from a junior ISA are free of UK income tax and capital gains tax. Children can take control of any money accumulated once they reach the age of 18. 

It’s also worth bearing in mind that 16 and 17-year-olds can have a junior ISA and an adult cash ISA at the same time, that’s two years of £24,368 being saved or invested tax-efficiently.

Could your money be working harder?

Investing over the longer term could help your money reach its potential.

Royal Bank Invest is a simple way to get started, invest online and Coutts investment managers will do the hard work for you. 

Investment values can fall and rise, your capital is at risk. Eligibility criteria, fees and charges apply.

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Keep your eye on pension tax relief

If you’re a UK taxpayer under 75, you could receive income tax relief on pension contributions. In the 2019-20 tax year you could get tax relief on up to £40,000, depending on your individual circumstances.

Remember, if you’ve got unused allowance from the last three tax years, you could carry it forward. You just need to have been a member of a pension scheme in those years.

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Make the most of your capital gains tax allowance

You’re entitled to an annual capital gains tax (CGT) allowance – in the 2019-20 tax year it’s £12,000. So until 5th April, you can sell shares, investments, property or other assets without paying tax on the first £12,000 of your gains.

You could gift assets to a spouse civil partner to allow them to utilise the most of their CGT allowances.

If you’d like assistance with planning for the tax year end or any other aspect of your finances, please contact your Premier Banking Manager who’ll be happy to help.