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.
That means that now is the time to cash in on the bigger allowance, so if you have sold any assets or investments at a profit this year, use it to offset your gains and therefore pay less tax.
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.
Share with your spouse
It might be beneficial for you to gift some of your asset before you sell it to your spouse or civil partner, that way you would have two CGT allowances to use.
Move proceeds of sales elsewhere
If you sell your investments and pay Capital Gains Tax using your current allowance, you then 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 in the new tax year.
Seek financial advice
Tax legislation can be extremely complex and difficult to get your head around. If you are 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.
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.
