End of year tax planning: what businesses and individuals can do

by Richard Mathews



Published on 7th January 2020

With 6 April and a new tax year just around the corner, now is the time for some end of year tax planning.

end of year tax planning

At Optimum, we work closely with our clients – many of them business owners – to ensure plans are in place and actions carried out to make the most of annual allowances.

Here are some steps you could be taking, particularly if you are a business owner.

End of year tax planning measures

  • If you have an ISA – or Individual Savings Account – make sure you have paid in the maximum to make use of the tax free allowance available. The allowance for 2019/2020 is £20,000 which can be spread across up to four different ISAs:
    • Cash ISAs
    • Stocks and shares ISAs
    • Innovative finance ISAs
    • Lifetime ISAs.
  • If you have control over your level of income, ensure you have made full use of your personal allowance, which for 2019/2020 is £12,500.
  • If you are a shareholder, ensure you’ve taken your tax free dividend allowance, which is currently £2,000.
  • The annual Capital Gains Tax allowance is £12,000, which means that if you are planning to sell an asset, the first £12,000 you make in profit is tax free. However, if you have already reached your CGT allowance, you might want to defer its sale until the new tax year.
  • Pension contributions are £40,000 per year per person. If you haven’t reached this, subject to your personal financial circumstances, you might want to pay in more before the new tax year.
  • For Inheritance Tax purposes, there is an annual limit of gifts you can make in any one tax year which are IHT free. Our wills and probate team can advise you on this.
  • If you are part of a couple, look at income equalisation to mitigate your tax liability by keeping as much of the joint income as possible in the basic rate tax band.

If you would like some help or advice with end of year tax planning, please get in touch with the tax team.

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