End of tax year checklist

As the end of the tax year approaches, now is the perfect time to use valuable reliefs and exemptions that otherwise would be lost: here are some ideas to consider.

• Ensure you have made use of your ISA allowance of ￡15,240.
• Ensure your spouse or partner has maximized their ISA allowance to fully utilise the combined allowance of ￡30,480.
• Make contributions of up to ￡4,080 per child into a Junior ISA to help younger generations get a head start.
• Those wishing to maximise pension saving should ensure they have fully utilised their annual pension allowance. Unused pension allowances can be carried forward, but only from the three previous tax years. If your 2016/17 allowance is fully utilised, you should review whether you have any unused allowances from the 2013/14 tax year first.
• If you’re thinking of making a large pension withdrawal, it could make sense to spread the withdrawal over two tax years to minimize your Income Tax liability.
• Take advantage of your annual Capital Gains Tax (CGT) exemption by taking gains of ￡11,100 in this tax year. Those with larger liabilities might look to take gains over two tax years, and make use of tax-free inter-spouse transfers.
• High earners should take steps to bring their taxable income down by making pension contributions or charitable donations. These can help individuals bring their income to below the additional rate tax band, which starts at ￡150,000; to regain their Personal Allowance, which starts to be withdrawn from ￡100,000; and avoid losing Child Benefit, which is gradually removed if one parent in the household earns more than ￡50,000.
• Use your Inheritance Tax gifting exemption of ￡3,000 for this year, and carry forward last year’s exemption if it hasn’t been utilised. 
• If you own a business, consider taking dividend income and a lower basic salary to reduce National Insurance contributions (NICs). The first ￡5,000 of dividend income is tax-free. Divert your pre-tax profits into a personal pension to reduce your company’s liability to Corporation Tax, Income Tax, including on dividends, and NICs. Contributions will need to be paid before your company’s financial year-end in order for the business to qualify for the deduction in that accounting period. In many cases, the deadline will be 31 March.