End of the 2018/19 tax year: why you need to look at ISAs, inheritance and your pension now (copy)

You’ve just one month left to take advantage of a bunch of Government tax allowances.

For most people, the end of the tax year isn’t a big occasion.

Yet when the 2019/20 year tax year starts on the 6 April, it’ll bring several important changes for your money.

Many of them are automatic: your income could be boosted, whether by the increasing minimum wage or rising tax brackets.

However, the end of the tax year also means the end of several allowances that could reduce the tax you pay – and therefore, save you money.

Many don’t roll over, and so not using these allowances by 6 April means you lose them forever.

To make sure you don’t miss out, we’ve put together a five-part checklist for the coming month.

Compare rates on Cash ISAs with loveMONEY

Start with ISAs

You’re allowed to put £20,000 per tax year in an ISA, which means you won’t have to pay tax on these savings or investments.

Using your allowance every year means you could build up an enormous savings pot that the Government can’t touch.

That £20,000 allowance doesn’t roll over, so it’s worth looking at your non-ISA savings accounts now, to see if there’s money you can move.

You can put that money into an existing ISA account, or open a new one, providing you haven’t opened one of the same type (i.e. Cash ISA) since April 2018.

For Cash ISAs, you can currently get a rate of 1.5% with Coventry Building Society, the joint best rate of any easy access account.

You can find out more about Stocks and Shares ISAs here, save for your kids with Junior ISAs or for your first home with the Help to Buy ISA or the Lifetime ISA.

Click on the links for more, or you can dive right in and view your options in the loveMONEY investment centre (capital at risk).

Pay into your pension

Each tax year you can get tax relief on pension contributions of up to £40,000, or 100% of your earnings, whatever is lower.

That might seem like a huge amount, but with most of us not saving enough for retirement, every little helps.

If you’ve already got an emergency savings fund, it’s time to look at putting more money into your pension, before the 6 April, to benefit from considerable tax relief, depending on your tax bracket.

Just be aware of the Pension Lifetime Allowance, currently £1,030,000, above which you get hit by considerable charges.

For more on pensions, read our complete guide.

Clear out your investments

It's also worth paying attention to your Capital Gains Tax (CGT) allowance.

You’re able to earn £11,700 per year in profits from selling assets including shares (excluding those in ISAs), second homes and very valuable possessions.

So, if you were planning on selling any of these anyway, and haven’t used much of your CGT allowance, it could be worth doing so before April.

If selling isn’t an option, there are other ways to reduce your CGT Bill: read our specialised guide for more.

Give £3,000 to your kids

Yes, we realise that spontaneously giving children vast amounts of money isn’t necessarily a good idea.

That said, making gifts of money to your children is one of the easiest ways to reduce your Inheritance Tax bill.

You’re able to give away £3,000 each year and even more if you didn’t use the allowance the previous year, or your children are getting married.

You don’t have to hand over cash – you could put the money into a Junior ISA – which, as mentioned above, is yet another allowance to use up before 6 April.

We’ve put together a full guide to passing on wealth, which you can find here

Top up your National Insurance contributions

The last month of the tax year is a good opportunity to plan for your own future.

Crucially, you should look at your National Insurance contributions and whether you’ve made enough to qualify for the full State Pension.

It is possible to fill the gap by making voluntary payments, but as our article explains, the cost of doing so is set to rise significantly on 6 April.

Too late for commuters (and smokers)

Most of the big tax year changes are announced in the Government’s Budget, made by current chancellor Phillip Hammond back in October.

Unfortunately, if you thought you had until 6 April to stock up on cigarettes (as Tobacco Duty is increasing) you’re out of luck – prices went up on 6pm on Budget Day.

Prices on many train tickets, which are pegged to RPI, went up by 3.1% on 2 January.