With the end of the current tax year drawing near, now is
the time to take action to ensure you make the most of the 2013/14 allowances
and know the changes taking place for 2014/15.
Firstly, if you have savings make sure you use your full ISA
allowance – the current limit is £11,520 and £3,720 for a Junior ISA. If you
don’t use it by April 5th you lose it. So if you think you might not
have used your full allowance for this year but would like to, then get in
touch and we can let you know.
Secondly, review your pension arrangements. From 6th
April 2014, the Government is reducing the Pension Lifetime Allowance from
£1.5m to £1.25m. If you have built up a significant pension pot and think you
may be affected by this, have a chat to us about applying for Fixed Protection
2014 in which you maintain a Lifetime Allowance of £1.5m.
In addition, the annual pension allowance is reducing from
£50,000 to £40,000. This includes payments you make, payments from your
employer or other third parties such as family members. You can potentially
carry forward any unused allowances from the previous 3 tax years.
You can also start pension contributions for your children
/grandchildren. They’ll get tax relief added at the basic rate but this won’t
affect your own tax bill. If they’ve no income, you can pay in up to £2,880 a
year which becomes £3,600 with tax relief.
From 6th April, the Capital Gains Tax (CGT)
threshold rises from £10,600 to £10,900 and both husband and wife have their
own allowance.
Now can also be a good time to get your other affairs in
order, for example, ensure you have an up-to-date Will or review your IHT
situation. The IHT threshold remains frozen at £325,000 for the third year
running and will remain there until April 2018.
If you would like to have a chat about any of the points
mentioned, please give us a ring on 0845 331 2604 or drop us an email at
info@lotusifa.co.uk.
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