2021 Early Tax Year End Planning Investments

Published / Last Updated on 08/12/2020

Personal Savings Allowance:  If you can get a higher rate of cash return outside a cash ISA and inside a cash savings account then don’t forget that you may have a Personal Savings Allowance for tax free interest on savings anyway – for basis rate taxpayers (20%) the PSA is £1,000pa tax free interest and for higher rate tax payers (40%) the PSA is £500pa tax free interest.  There is no PSA for additional rate tax payers at 45%.

  • If you are a low earner/low income below £12,500pa, you also have in addition another tax free savings allowance in additional of £5,000pa interest tax free.

If you don’t invest in stocks and shares then consider that there is a £2,000pa tax free dividend allowance.  This means you can earn up to £2,000 pa tax free from dividends when invested in shares.

Make sure you use up your usual ISA allowances of £20,000pa per adult and junior ISAs £9,000pa per child.

Other areas that may interest savers and investors are venture capital trusts and enterprise investment schemes attract 30% tax relief.  Also, insurance investment bonds may be of interest to defer taxation or assign investments to others in a lower tax position which means they may be able to take gains without any further tax due.

Don’t wait, get some early tax year end planning done now.  Contact us.

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