Best to obtain specialist tax accountant advice as recommendations can change depending on individual circumstances. Following is a summary list of key areas to consider before 5th April.
• Higher rate taxpayers should consider using up unused pension contribution allowances, including those from previous years, in anticipation of future relief changes.
• Married couples and civil partners – maximising reliefs and equalising incomes for 2015-16
• Parents’ receiving child benefit – keeping adjusted incomes below £50,000 to avoid losing benefit (all child benefit lost when just one parents adjusted income exceeds £60,000)
• Keep adjusted income for 2015-16 below £100,000 to avoid 60% marginal income tax rate as personal allowances are lost.
• Adjusted income can be reduced by making pension, charity or other tax allowable contributions, giving income yielding assets to a spouse, etc.
• Use your 2015-16 income tax personal allowances and exemptions to the full (and those of your partner and/or kids where possible/worthwhile)
• Payback private fuel to reduce or eliminate car fuel benefits.
• Gift aid – maximise generous tax relief on donations including carry back planning.
• Review your investments – tax is not the only factor but consider using any unutilised ISA allowances if possible, employer scare schemes, tax reliefs on higher risk investments (EIS, SEIS, VCTs, community or social enterprise investments).
• Consider any timing opportunities to utilise £11,000 annual capital gain exempt amount and other reliefs and allowances before 6th April.
• Inheritance tax (IHT) – use of annual/other reliefs and other estate planning to reduce IHT. There is consider scope to structure matters to reduce IHT, depending on circumstances (use of trusts, pension funds, charitable contributions, etc.) and it is advisable to ensure your will is regularly updated.
• Take action to protect a large pension pot if close to or will be close to the reducing Lifetime allowance
• Company cars, time for a new approach? Consider clients’ options for easing the fiscal burden of a company car fleet from April 2016.
• Businesses should review turnover levels etc. and consider whether VAT arrangements/ special schemes are optimal and allowable.
Owner managed companies/Directors
• Assuming enough reserves, owner managed companies should consider accelerating dividend payment into the current tax year, to reduce impact of new dividend tax increases, though income tax will be paid earlier. If cash is tight can credit dividends to a loan account.
• Overdrawn directors’ loans – reminder to avoid additional corporation tax payments
• Tax and business planning opportunities – particularly, for businesses with 31 March year ends.
• Landlords defer replacing furniture until after the 5th April (10% wear and tear allowance goes but will likely qualify for new replacement furniture relief).
• Those buying second homes or property to let should consider buying before 1st April to avoid Stamp Duty increases.
• Unincorporated Landlords with high borrowings – start planning in 2016 for phased loss of higher rate relief on interest expense from April 2017.