Why not use your ISA and Pension allowances now rather than waiting until March 2018, any growth achieved will at least be growing virtually tax free.
Remember that the ISA allowance has been increased from £15,240 to £20,000 per individual from the 6th April 2017.
The allowances for a Junior ISA / Chid Trust Fund have increased by £48.00 to £4,128 per child.
Bed and ISA
If you don’t have the capital on deposit and have investments which are in taxable investment accounts then it is possible to do a Bed and ISA. The idea is simple: you sell your non-ISA investments and then use the proceeds to buy them back immediately, but this time within your ISA using your annual tax-free allowance, meaning the assets are out of reach of the taxman.
It is possible to generate capital gains of up to £11,300 this year that will be exempt for capital gains tax which can assist you with building more of your taxable investments into tax efficient investments.
Any investment gains above this amount will be taxable, at either 10% or 20% dependent on your marginal rate of tax.
The Annual Allowance is currently set at £40,000 per tax year, however your contribution cannot exceed 100% of your earnings unless you have unused relief from previous tax years.
There are some circumstances where an individual’s Annual Allowance will have been reduced to as little as £10,000 per tax year, so it is important to seek advice, as there are tax consequences if you exceed your Annual Allowance.
Making a pension contribution is an effective way of retaining some allowances and saving tax.
Don’t forget that you can make pension contributions for each of your children and or grandchildren up to £3,600 gross per annum.
What to do next
Get in touch with one of our consultants who are on hand to guide you through making the most of all your tax free allowances.