Pensions and the Tax Year End

There are lots of things to consider if you want to maximise your tax year end pension allowances. Here’s a checklist to help you when you’re reviewing pensions and the tax year end.

1. The current allowance is £40,000 and there will be no changes to this for the next tax year. The tapered and money purchase annual allowances remain the same.
2. The lifetime allowance for the financial year 18/19 is £1,030,000. This will increase to £1,055,000 in 19/20.
3. Higher earners (those earning over £150,000) need to consider the effect of the tapered annual allowance, which gradually reduces the amount that can be contributed to pensions to a minimum of £10,000.
4. It may be possible to carry forward any unused annual allowances from previous tax years allowing pension contributions higher than the client’s annual allowance.
5. Individuals can pay pension contributions into other’s pension plans e.g. non-tax payers such as children and grandchildren.
6. The Scottish government has introduced new tiers and rates of income tax for Scottish residents. This may have an impact on savings and investment decisions.

Any action you take should be set against your financial plan.

I is for ISA

The annual subscription limit for 2018/19 tax year £20,000. So a couple maximising their respective limits can invest up to £80,000 across two tax years. Now is also a good time to review existing ISAs – e.g. is the asset mix appropriate?

J is for JISA

A JISA (Junior ISA) is a tax efficient medium to long term investment solution for children under the age of 18.

For more details please contact Andrew Hannay, Jeffrey Lewis or Lisa Davies