This is a guest article from Stuart Walker, a financial planning specialist at Partners Wealth Management.

Whilst the past 6 months has thrown up several new challenges for our rural and business communities the one constant, we can rely on is the Tax Year End on 5 April. By planning in advance, you can maximise the valuable tax allowances available each tax year.

The Budget has highlighted that planning is more important than it has ever been and doing nothing won’t be an option.

Below are the five important things to remember when planning for the Tax Year End on 5 April: 

1. Use your ISA allowance

ISAs provide a tax efficient environment for your savings. The maximum investment that may be made during the 2024/25 tax year is £20,000. However, you should be aware that any unused investment limit cannot be rolled forward into next year – so make use of your saving limit before April.​

2. Manage your investments

Investing in qualifying Venture Capital Trusts (VCT) will attract 30% income tax relief (maximum investment of £200,000) providing the investment is held for five years. Dividends are tax free, and no Capital Gains Tax is paid on disposal. Whilst such investment may reduce your income tax liability, they are only suitable for clients with a high tolerance to risk who can afford to bear loss of capital, so seek appropriate professional advice before making an investment.

3. Maximise your pension contributions

Contributions to your personal pension plan attract income tax relief. The maximum contribution that may be made for 2024/2025 without incurring an income tax charge is £60,000. You may be able to make additional contributions if you have not fully used your annual allowance in the previous three tax years. Contributions must be made before 5 April 2025 if tax relief is to be claimed in tax year 2024/2025.

Please note high earners continue to be impacted by the reduced annual allowance for those earning over £260,000. With the maximum pension amount for high earners being £10,000 dependent on your earnings therefore seek professional advice to determine if you are affected by the tapered annual allowance.

4. Capital Gains Tax

For 2024/25, capital gains up to £3,000 per person will not give rise to a capital gains tax liability. So, where possible think about using your annual capital gains tax exemption before 5 April 2025 as any unused balance cannot be carried forward.

5. Inheritance tax

The October budget created far wider issues for the rural and business communities around Inheritance Tax planning but doing the basics remains.

If you are considering making gifts to family and friends in the near future, ensure that you have maximised your annual inheritance tax gift exemptions for this tax year. You may also utilise any unused part of the 2023/2024 exemption, but this will be lost if not used by 5 April 2025.  The annual gift exemption is £3,000.

Talk to your adviser

The above is a brief overview of some of the actions that you can take to reduce your tax liability, however there are other options available that you may want to consider for your own personal situation. As always, we recommend that professional advice is sought with your financial planner before taking action. 

If you would like to discuss this further, please don't hesitate to reach out to a member of the Partners Wealth Management team at info@partnerswealthmanagement.co.uk.