Its Almost the Tax Year End, so we have listed some Tips for Tax savings!
Make use of your tax-free ISA allowance.
The annual limit for 2016 is £15,240, the same as it was for 2015. This can all be put in a cash ISA, but with rates low and the first £1000 of interest being tax free, why not consider putting it all in a stocks and shares ISA or split between both cash and stocks and shares?
The allowance will rise for 2017 to £20,000. However if you miss the ‘year-end’ deadline, the 2016 allowance is lost.
Use Pension Allowances Fully
If you have the funds, you can make use of any unused Pension annual allowances. Provided that you were a member of a registered pension scheme during the last three years, Carry forward allows you to make use of any annual allowance that you may not have used during the three previous tax years, and obtain relief on the contribution. To benefit from carry forward, you must make the maximum allowable contribution in the current tax year (£40,000 in 2016-17) and you can then use unused annual allowances from the three previous tax years, starting with the tax year three years ago.
Stocks and Shares Junior ISA
Instead of a Cash Junior ISA, consider the long-term growth potential of the stock market and put away up to £4,080 in a Stocks and Shares Junior ISA.
Your money can be invested in funds, bonds, or individual shares and as other stock market investment if they perform well the value of your investment goes up, but they can also go down based on market performance. Its worth mentioning with all investment based products you could get back less than you’ve paid in.
Review Your Life Insurance
Many people have life insurance that is being paid for personally from their own bank accounts. Since the introduction of relevant life insurance, you can often make significant savings by having your limited company pay your premiums instead. The relevant life policy is set up under a special trust and gets around potential P11D issues by using pension legislation.
Therefore the premiums are treated as a business expense and tax relief is normally available.