Are you making the most of end of tax-year planning opportunities?

Boost your pension

One of the best things about pensions is the upfront tax relief you’ll receive on any contributions – you’ll get 20% automatically, and higher and additional rate taxpayers can claim an extra 20% or 25% tax relief via their self-assessment tax returns.

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The maximum amount you can pay into your pension this tax year, known as your Annual Allowance, is £60,000. Sean McCann, chartered financial planner at NFU Mutual said: “If you have earnings of more than £60,000 you may be able to pay an increased amount into your pension before the 5^th April, by taking advantage of any unused pension allowance from the previous three tax years. “

In the current tax year, you could carry forward up to £140,000 from the previous three tax years (2021/22, 2022/23, 2023/24) on top of this tax year’s allowance of £60,000, resulting in a potential total gross contribution of £200,000 in 2024/25.

You can not only pay into your own pension but also a family member’s pension if you want to. Any contribution from one individual to another family member is treated as if it is the member’s own contribution into their pension.

Make the most of your ISA allowance

Each person has an allowance of £20,000 a year which can be paid into tax-efficient individual savings accounts (ISAs), which means if you’re part of a couple together you can put away up to £40,000 per year tax-free.

Bear in mind that if you don’t use your ISA allowance by April 5, it’ll be gone for good. You can choose from a stocks and shares ISA, cash ISA, an Innovative Finance ISA, where your money is lent via a peer-to-peer lending platform, or you can split your allowance across a combination of these. You’ll get a new £20,000 allowance on April 6, when the 2025/26 tax year begins.

You can also pay into Junior ISAs on behalf of your children. Laura Suter, director of personal finance at AJ Bell said: “A Junior ISA is a great choice for many parents. You can save up to £9,000 a year, and the money is locked away in your child’s name until they turn 18. But if you want more flexibility, you could use your own ISA instead. This means using up part of your £20,000 annual allowance, but it also allows you to access the money if needed. However, if you think you might be tempted to dip into it, keeping the funds locked up in a Junior ISA could be a better option.”

Minimise any potential IHT liability

If the value of your estate is more than £325,000 when you die, inheritance tax will usually be payable at a rate of 40% on anything above this threshold, although anything left to a spouse or partner is exempt from inheritance tax. There is also a £175,000 ‘family home allowance’ which can be used against the value of your property if you leave it to your children or grandchildren.

If the value of your estate is near or above the current IHT threshold, the good news is there are several allowances available which enable you to pass on some of your wealth free of inheritance tax. For example, you can give a gift of up to £3,000 a year which can be rolled forward by a year if you don’t use it, as well as small gifts of up to £250.

Free guide to saving Inheritance Tax

Nicholas Hyett, Investment Manager at Wealth Club said: “One way to avoid the taxman having your cake and eating it too, is to make gifts out of surplus income. By making regular gifts out of leftover income at the end of the month you can pass money on to your loved ones free of inheritance tax.

“Gifts out of surplus income are particularly popular with grandparents, who use it to pay for things like school or university fees. Avoiding double taxation from inheritance tax is a nice added sweetener.”