D is for deadlines
In the run up to the end of the tax year there are a number of key dates and deadlines that you need to be aware of to make sure you've left enough time to order and settle trades, post applications and for Nucleus to process your requests.
Tax year end provides an excellent opportunity to make sure clients are maximising available pension allowances. Clients can benefit from tax relief on pension contributions for up to 100% of their annual salary, to a maximum of up to £40,000 (lower if they are a higher earner or already taking drawdown income). They can also carry forward unused annual allowances from previous years, not to mention the opportunities around maximising the lifetime allowance (LTA).
Isa and Jisa
Where possible, your clients should use their annual Isa subscription limit of £20,000 for the 2018-19 tax year. Jisa also carries a subscription limit for this tax year of £4,260 which is another opportunity for clients to maximise tax allowances while investing in their childrens' or grandchildrens' futures. Our factsheet includes information on subscription limits and deadlines.
Other tax-efficient investments
Once pension and Isa allowances are taken care of, there are other tax-efficient investment opportunities you can consider when reviewing client portfolios in the run up to the tax year end. These include maximising personal income allowances, considering charitable gifts, investment bonds and venture capital trusts, depending on client circumstances.
Pensions and the tax year end
There are lots of things to consider when helping a client maximise their tax year end pension allowances. Here’s a checklist to help you when you’re reviewing pensions and the tax year end for your clients, and you can download our factsheet below to find out more.
Download the tax year end pensions factsheet
I is for…
Isa – use it or lose it
The annual subscription limit for the 2018-19 tax year end is £20,000. Clients have until 5 April to use it or lose it. This subscription limit will remain the same for 2019-20, so a couple maximising their respective Isa subscription limits can invest up to £80,000 between them across the 2018-19 and 2019-20 tax years. There's a huge opportunity to support clients in maximising the allowances available to them in relation to Isas.
J is for…
Jisa – intergenerational financial planning
The inter-generational transfer of wealth will be a huge opportunity for the advice professional over the next decade and beyond. Jisa is a tax-efficient medium-to-long-term investment solution, which can be withdrawn or transferred to an adult Isa once they turn 18 years old.
Download the tax year end Isa and Jisa factsheets
Other tax-efficient investment considerations
Income tax allowances
Clients should maximise use of their
Capital gains tax
The capital gains tax annual exempt amount for this financial year is £11,700, and this will increase in 2019-20 to £12,000. If possible, it’s advisable for clients to use up their allowance in the tax year, as it can’t be carried forward into the following tax year.
Inheritance tax is payable on death if the value of your client's estate is over £325,000. There are some ways clients can minimise the amount of inheritance tax payable on their estate, for example through gifts, charitable donations and taking advantage of inheritance tax reliefs.
Use of investment bonds may be an attractive way to defer an income tax liability, particularly for those paying at higher marginal tax rates.
Enterprise investment schemes and Venture capital trusts
Those with a greater appetite for risk may want to consider Enterprise investment schemes (EIS), Seed Enterprise investment schemes (SEIS) or Venture capital trust investments.
Downoad our factsheets on tax and income and tax-efficient investments
Get in touch to learn more
Nucleus is an adviser-built wrap platform, supporting financial advisers deliver outstanding financial outcomes. To find out more how we could support you with tax year end, fill in the form below and we'll be in touch.
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