The 2023/24 tax year is coming to an end on April 5th, so you don’t have long left to use your various allowances – in particular your Capital Gains Tax allowance.
This is especially important this year as your Capital Gains Tax allowance is being cut from £6,000 to £3,000 from April 6th.
So what does this mean for you?
Well, it means that now is the time to cash in on the bigger allowance, so if you’ve sold any assets or investments at a profit this year, use it to offset your gains and therefore pay less tax.
If you haven’t used all your allowance, you can transfer unused portions to your spouse or civil partner, so they can save tax on their capital gains too.
Move proceeds of sales elsewhere
If you sell your investments and pay Capital Gains Tax using your current allowance, you also have the option of moving the remaining money into tax-efficient accounts such as pensions and ISAs.
Even if those accounts are already full, you can still sell now and move the money later when they have new allowances.
Plan ahead for next year
With the Capital Gains Tax lowering to £3,000 in the next tax year, it’s worth planning ahead where possible and thinking about where you can move money to in order to lower your tax liability in 2024-25.
Seek financial advice
Tax legislation can be extremely complex and difficult to get your head around. So if you’re not completely sure about how to reduce your tax bill and what allowances you can benefit from, it’s well worth seeking professional advice.
A financial advisor with extensive knowledge and expertise in tax rules and regulations can outline the various options that are open to you.
You’ll then be in a good position to maximise your allowances and be confident that you’re making the right decisions.
If you have any questions about managing your tax affairs and making your money work as hard as possible for you, please don’t hesitate to get in touch with us.