The current tax year will end
on the 5 April 2015, so you still have time to sort your tax planning before
the year closes, but the best advice is to get it done as soon as possible.
The main areas to make tax
efficient investments are Pensions and NISAs.
Pensions
Pensions are one of the most
tax efficient investment vehicles, for personal contributions, you will receive
20% tax relief on your contribution. If
you a higher or additional rate tax payer you can claim a further 20% or 25%
relief respectively via your self assessment.
The maximum annual personal
pension contribution that can be made is 100% of your relevant UK earnings (up
to a limit of £40,000 gross).
Major changes will come into
effect from 6 April 2015, from flexibility on how to draw your benefits to passing
on your pension after death to beneficiaries more tax efficiently.
New Individual Savings Accounts (NISAs)
The Government also made
changes to NISAs from 1 July 2014. The
annual allowance increased from £11,880 to £15,000; complete flexibility on
amounts contributed to cash or Stocks & Shares, for the first time Stocks
& Shares can be transferred into cash and continue to hold its NISA
wrapper.
If you have not used your
full NISA allowance by 5 April, you will not be able to carry this
forward. As of 6 April 2015, the annual
NISA allowance will increase up to £15,240.
Alternatives
If you have used your NISA
and pension allowances already, there are alternatives open to you that will
offer relief to reduce your income tax along with other benefits. Investments such as Venture Capital Trusts
(VCTs) and Enterprise Investment Schemes (EISs) offer tax relief but are seen
as riskier investments.
For more information do not hesitate to
contact Cliff Pocock at Ward Williams Financial Services Ltd on 01932 830664 or by email on wwfs@wardwilliams.co.uk.
