Over the next four weeks we will be looking at providing hints, tips and instructions as to what you can do to tidy up your tax position to maximise the return on your investments or on the income that you receive.
These articles will be short and sweet and simple to digest, and is mainly based on taxation as applied in England and Wales.
We will be looking at breaking this down into four distinct areas.
- Personal taxation issues and ways to reduce the liability
- What to do with your investments and cash
- End of year ISA and Investment planning
- Pension planning and taxation issues
This week we're covering how you can reduce your personal tax bill.
Everyone in the UK has a personal allowance, on which no tax is paid. This figure is £12,500 for 2019/20
Marriage allowance - You may be able to transfer £1,250 of your personal allowance to your spouse or civil partner if neither of you are higher-rate taxpayers earning less than £50,000. Check your eligibility and apply here. https://www.tax.service.gov.uk/marriage-allowance-application/eligibility-check.
Personal Savings Allowance - Getting the interest on your Bank Interest tax free, this may seem obvious but if you are a Married Couple and one of you is a Higher rate taxpayer with all the cash in your account then it would be more tax-efficient to move money into the Basic Rate tax-paying partner
Up to £1,000 of bank interest is free for basic taxpayers
This is reduced to £500 for 40% taxpayers
If your tax-rate is above 45% then it is reduced to £0
Action – Review your current cash on deposit and in whose name and realign the holdings.
Join us next week where we will share information on what to do with your investments and cash. To keep up to date with tips and tricks regarding personal finances follow us on Facebook
Click Here to find out how COVID-19 may effect your Investments.