This weekend is the last one you’ll have before Rishi delivers his Budget on Wednesday 3 March. So, whilst I strongly advise you all to take some time to rest and relax, get out into open air, speak to loved ones and do whatever else it is that brings you joy – if ever there was a weekend on which thinking about your finances deserved at least a small amount of time, this is it.
I’ll keep it brief, and if anything piques your interest, feel free to reach out to us to discuss.
Use your pension and ISA allowances
It is possible that allowances will be reduced effective Wednesday, so if it’s something you’re already planning to do before the tax year ends, doing it sooner would be wise.
Pension contributions are generally more tax-efficient, albeit you’re locking the money away for longer.
Other tax efficient investments
Investments made in businesses under SEIS or EIS are highly tax-efficient. Investments made before 5 April 2021 can be relieved against the 2019/20 tax year.
Get ahead on capital gains
It’s in the spotlight, so make it a key focus. Pete’s blog on preparing for the possible changes is well worth a read.
Income tax savings
Couples in particular can relatively easily switch income between them with some straightforward planning. Key trigger points are at £50k, £100k and £150k. If you or your partner have income close to those thresholds, we can help to reduce the tax burden.
Inheritance tax planning
Whilst this area is not generally related to the tax year, if you’re in financial planning mode it’s worth thinking about that Will you keep meaning to write or update. Gifts totalling up to £3,000 are exempt from IHT before 6 April 2021 (£6,000 if you also didn’t use your 2020 exemption)
For broader planning, see my blog on Family Investment Companies.
Also not as strict on timing as donations can be used against the prior or next tax year, but if you’re feeling generous there are plenty of organisations in need of support, and there are tax reliefs for doing so under Gift Aid.
We won’t know what surprises will be revealed until Rishi opens that famous red briefcase of which he is the current master – so this is not a speculative article, rather a simple summary of what we do know that you can do before the Budget comes and potentially prises the opportunity away.
There are decisions to be made, even if they are to decide to think about them again next year. Understandable, if not advisable.