{"id":5354,"date":"2025-03-13T14:53:46","date_gmt":"2025-03-13T14:53:46","guid":{"rendered":"https:\/\/www.goodmanjones.com\/blog\/?p=5354"},"modified":"2025-03-14T16:36:34","modified_gmt":"2025-03-14T16:36:34","slug":"year-end-tax-planning-key-allowances-and-strategies-before-6-april-2025","status":"publish","type":"post","link":"https:\/\/www.goodmanjones.com\/blog\/year-end-tax-planning-key-allowances-and-strategies-before-6-april-2025\/","title":{"rendered":"Year-End Tax Planning: Key allowances and strategies before 6 April 2025"},"content":{"rendered":"

As we approach the end of the 2024\/25 tax year, now is the perfect time to consider tax planning before we reach 6 April 2025.<\/p>\n

Pension contributions<\/h3>\n

If you are a member of a pension scheme, have you utilised your annual allowance for the current tax year?\u202f You are able to utilise any unused allowances from the last three tax years (so for 2024\/25 this relates to 2021\/22, 2022\/23 and 2023\/24).\"\"<\/p>\n

The annual allowance is currently \u00a360,000 (\u00a340,000 for 2021\/22 and 2022\/23).\u202f This can be tapered down to \u00a310,000 (\u00a34,000 for 2021\/22 and 2022\/23), and will apply if your total income along with your pension contributions made by your employer (which includes contributions made by you before tax) exceed \u00a3260,000.<\/p>\n

Be mindful if you have the option to make flexible drawdowns, as this will limit your allowance to the minimum. Any contributions exceeding your available allowances will be taxed at your marginal rate.<\/p>\n

Please note that if you do not have income in a tax year, then a contribution can be made up to \u00a32,880 with a further 20% contribution made by HMRC, so that your total contribution is \u00a33,600.<\/p>\n

In addition to contributions to your own pension, you can also make contributions of up to \u00a32,880 towards a Junior SIPP for the benefit of your child\/children.\u202f The \u00a32,880 limit is per child, though the contributions are increased for an additional 20% by HMRC, making the total contributions made each year up to \u00a33,600.<\/p>\n

If you would like to discuss your available pension allowances<\/a> or would like to check you haven\u2019t already exceeded them, please reach out to your usual contact at Goodman Jones.\u202f We always recommend taking financial advice when it comes to making pension contributions and we can put you in touch with a trusted IFA if you do not have one already.<\/p>\n

Individuals savings account (ISA) allowances<\/h3>\n

The current ISA allowance is \u00a320,000 and this can be invested with cash as well as stocks and shares, along with other select investments.\u202f There is also a Junior ISA, where parents or guardians can invest for their children that are under 18.\u202f The current Junior ISA allowance is \u00a39,000.\u202f Once the child turns 18, the Junior ISA becomes an adult ISA.<\/p>\n

Any income generated and capital gains realised on assets held within an ISA are all tax free.\u202f Please note that the allowances must be used before 6 April 2025 when the limit is reset, and there is no possibility of bringing these allowances forward.<\/p>\n

Capital gains tax (CGT) annual exemption & dividend allowance<\/h3>\n

The annual exemption is a tax-free allowance for CGT, which has been massively reduced in the last few years, currently a mere \u00a33,000 in 2024\/25, down from \u00a36,000 in 2023\/24.\u202f This does not get rolled forward, so will be lost if not used before 6 April 2025.<\/p>\n

The dividend allowance has also been squeezed down in recent years to just \u00a3500 in 2024\/25, down from \u00a31,000 in 2023\/24.\u202f Again, if this is not used before 6 April 2025 then the allowance will be lost.<\/p>\n

Inheritance tax (IHT), reliefs & exemptions<\/h3>\n

There are various gifting exemptions and reliefs that allow you to reduce your estate in an IHT-efficient<\/a> way:<\/p>\n