Get ready: Financial housekeeping ahead of the tax year end (2024/25)

By Pooja Shah

With the tax year-end rapidly approaching, Castlefield adviser Pooja Shah shares some financial housekeeping tips ahead of the 2024/25 tax year end.

With the new calendar year underway, the tax year-end on 5 April is rapidly approaching. Now is a crucial time to maximise all available allowances, ensuring your wealth is structured as tax-efficiently as possible. By doing so, you can achieve greater financial flexibility in the long term. To get your tax year-end house in order, here are my key reminders:

1. Maximise ISA Contributions

  • The annual ISA allowance remains at £20,000 per individual.
  • Consider using Stocks & Shares, Cash, Lifetime, or Innovative Finance ISAs before the deadline.

2. Pension Contributions & Tax Relief

  • Annual allowance: £60,000 (tapered for high earners).
  • Carry forward unused allowances from the past three tax years.
  • 20%-45% tax relief available depending on income tax band.

3. Capital Gains Tax (CGT) Planning

  • Annual CGT exemption: £3,000.
  • Consider realising gains up to the allowance before 5 April.
  • Transfers between spouses are tax-free and can help utilise allowances.

4. Dividend Allowance & Planning

  • Dividend allowance: £500

5. Personal Allowance & Tax Bands

  • Personal allowance: £12,570 (tapered for income over £100,000).
  • Salary sacrifice arrangements can reduce taxable income.

6. Inheritance Tax (IHT) & Gifting

  • Annual gift allowance: £3,000 per year, plus small gift exemptions.
  • Consider gifting before the year-end to reduce the estate’s value.

7. Use of Marriage Allowance

  • If one spouse earns below £12,570, they can transfer £1,260 of their personal allowance to their higher-earning partner if they are a basic rate tax payer.

8. Claim Tax Reliefs & Allowances

  • Self-employed individuals should ensure all eligible expenses are claimed.
  • Check for possible tax relief on professional subscriptions, home working, etc.

9. File Returns & Make Payments on Time

  • Deadline for 2024/25 tax return corrections: 31 January 2026.
  • Avoid late tax payments to prevent penalties and interest charges.

Over the next few weeks, you have the opportunity to take stock of your situation and make use of allowances suitable for you. We would always suggest seeking professional advice as this is not one size fits all and allowances which suit others may not be appropriate for you.

Written by Pooja Shah