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With the end of the tax year fast approaching, many will want to consider getting their tax and investment affairs in order sooner rather than later. Here is a handy guide to things you should be considering (in no particular order). Many tax efficient allowances are tax year specific, meaning if it isn’t used, it’s lost.


1. Charitable donations


Charitable donations, as well as doing good, also attract tax relief via Gift Aid. If you are considering being generous, consider which tax year you do it in and remember to tick the Gift Aid box as your chosen charity benefits and if you are a higher rate (or additional rate) tax payer you can also reclaim some tax.


2. Use capital gains tax allowance


This is one of the most underused tax allowances, but up to £11,700 is available to all, tax free every tax year. Be clever with this allowance. If it gets near the end of the tax year, and the allowance hasn’t been used, then why not look at your portfolio and see if there are alternatives to those investments pregnant with gains. Many use this allowance to generate a tax free income.


3. Use your ISA allowance


Still one of the best allowances. £20,000 is a generous allowance that can give tax free growth and income. On a typical dividend yield of 3.5%, £700 of income could be generated tax free each tax year.


4. Contribute to pension where possible


Even though successive chancellors are doing their best to kill off pensions, using your allowance is usually a good thing. Upfront tax relief, tax free growth and potentially inheritance tax free status are three benefits – the downside is taxable income when the pension is taken and having your capital tied up until at least the age of 55. Non-earners also have an allowance of £2880 each tax year.


5. Make use of spouse’s allowances


Many high earners have non-earning spouses. If that is the case, organise your affairs tax efficiently so that their valuable tax free allowances aren’t lost. Their personal allowance of £11,850 and capital gains tax allowance of £11,700 could be utilised by transferring assets to their name.


6. Do JISA and pension contributions for children and grandchildren


Children also get their own long term annual investment allowances. Make use of the Junior ISA allowance of £4,260 and the pension allowance of £2880 before 5 April.


7. Don’t forget your tax free dividend allowance


Everyone gets a £2,000 tax free dividend allowance; it might not be as high as it used to be but it’s still a valuable allowance. Especially useful for small business owners who can time when they take dividends.


8. Consider ways to reduce income tax bill by investing in VCTs, EIS, SEIS


For high earners who have already utilised their ISA and pension allowances, more specialised higher risk investments are available that can help reduce income tax bills, capital gains tax bills, produce tax free growth and income. A total of £1.3 million could be invested in these three investments this tax year offering a tax rebate of £410,000 (for those lucky enough to earn that much!). You can also use EIS/SEIS to reclaim tax from the 2017/18 tax year


9. Don’t forget the transferable married couple allowance


The Marriage Allowance lets you transfer £1,190 of your personal allowance or your husband, wife or civil partner. It only works when one is a non tax payer – the receiving partner needs to be a basic rate tax payer. It could save £238 this tax year. You can also backdate this allowance for three tax years. (The rules are slightly different in Scotland).


10. Use your annual gift allowances to reduce your estate


Every individual can legitimately reduce the value of their estate each year by gifting assets within specified limits. For those with larger estates this could be particularly useful.

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