Make the most of your annual tax reliefs - sponsored feature

Wealth manager Brewin Dolphin has highlighted some of the key ways to make the most of tax reliefs - sponsored feature

Owen Humphreys/PA Wire

When it comes to making your savings and investments work hard, it is just as important to make the most of your tax reliefs as it is to chase the best interest rates and portfolio returns.

These naturally include ISA allowances, but savers are often unaware of other simple ways to enhance their financial planning strategies.

Wealth manager Brewin Dolphin has highlighted some of the key ways to make the most of tax reliefs before the end of the tax year on 5th April, the benefits of which will last a lifetime.

Nick Fitzgerald, Head of Financial Planning at Brewin Dolphin, commented: “ISAs are an excellent example of a strategy that people should consider implementing every year which, over time, can greatly enhance their savings. The end of the tax year is approaching rapidly, and we urge savers to make full use of the reliefs available to them. Just remember to seek professional advice as everyone’s individual circumstances are different.”

What to do next

Square One Law, Brewin Dolphin and Deloitte have joined forces to offer advice on personal finance from a wealth management, legal and tax perspective.

For general enquiries about financial planning, please call on 0191 230 7060. This number will take you through to the Brewin Dolphin team who will pass on your query to the relevant expert.

Alternatively, fill in the form at the bottom of this article to outline your enquiry. Our experts will respond to your enquiry within three working days by your preferred method of contact.

The key options you may need to discuss with an advisor are outlined as follows:

How to use your ISA allowance

  • Those aged 18 and over can invest up to £15,240 each
  • Parents can also fund Junior ISAs up to £4,080 each
  • Remember that most income and all capital gains from ISAs are tax free, so consider using the allowance for your risk based investments rather than your cash
  • From Autumn 2015 the introduction of new flexibility to your ISA and support for those saving in order to get on the property ladder

Consider possible pension contributions

  • The pension Lifetime Allowance (LTA) remains at to £1.25m , however the Chancellor announced that the LTA will fall to £1m from 6th April 2016. We strongly recommend seeking professional advice especially for those who may be impacted by the reduced LTA
  • The next tax year will also see the annual pension contribution which attracts tax relief at your marginal rate remain at £40,000 gross. You should check this year and contribute the maximum amount if your UK relevant earnings allow
  • You will receive 20% tax relief if you make a stakeholder contribution of up to £3,600 gross for your children or non-working spouse
  • For parents: if making a further pension payment brings your individual taxable income(s) below £50,000, you may be able to reclaim / retain child benefit (e.g. you would currently receive £2,475.20 p.a. in child benefits for three children of education age)

Transfer assets

  • Transfer income producing assets to your spouse or civil partner if they are a lower rate tax payer. Calculate the income from the asset per £1 and transfer enough to use up the lower tax band. (e.g. Mrs X is a 40% taxpayer, Mr X is a 20% taxpayer, so transfer assets to Mr X)
  • The same can be done with regard to capital gains, which is charged at 28% for high rate taxpayers and 18% for basic rate. Transfer assets with gains to the lower rate taxpayer and use up both of your allowances, which stand at £11,100 each for the 2015/16 tax year
  • When it comes to inheritance tax, you can use your annual exemption allowances of £3,000 each for the 2015/16 tax year. If you didn’t use last year’s allowance you can add that, increasing the allowance to £6,000 each

Offset losses to reduce your capital gains tax

  • Consider ‘realising’ a gain or loss to offset against your annual CGT allowance (£11,100)
  • Remember also that you can effectively increase your CGT allowance if you decide to sell one of your assets at a loss, since this can offset gains elsewhere
  • Note that excess losses can be carried forward, but normally have to be claimed within four years

Seek advice on other forms of enhanced tax relief

  • For those with a higher risk appetite, an Enterprise Investment Scheme (EIS) or Venture Capital Trust (VCT) can offer some great tax incentives, but it is essential to seek advice before investing in this sort of scheme
  • You can invest up to £1m into an EIS per tax year, although note that you must remain invested for a minimum of three years. For those with a medium term investment horizon, benefits include 30% income tax relief on the premium, deferral of capital gains tax and the ability to offset capital losses against your income tax bill
  • You can invest up to £200k per tax year into a VCT, (minimum 5 years) the benefits of which include 30% income tax relief on the premium, and dividends that are free of income tax
  • Note that to receive the 30% tax relief you need to have paid at least the equivalent amount in income tax

What to do next

Square One Law, Brewin Dolphin and Deloitte have joined forces to offer advice on personal finance from a wealth management, legal and tax perspective.

For general enquiries about financial planning, please call on 0191 230 7060. This number will take you through to the Brewin Dolphin team who will pass on your query to the relevant expert.

Alternatively, fill in the form below to outline your enquiry. Our experts will respond to your enquiry within three working days by your preferred method of contact. If you can't see the form below - click here to open in a new window.

Any investment mentioned in this article is for illustrative purposes only and is not intended as investment advice. Any tax advantages mentioned are based on current legislation accurate at the date of print which is subject to change. The opinions expressed in this document are not the views held throughout Brewin Dolphin. No Director, representative or employee of Brewin Dolphin accepts liability for any direct or consequential loss arising from the use of this document or its contents

Brewin DolphinBrewin Dolphin

Brewin Dolphin is one of the leading providers of wealth management services in the UK and we have been helping clients make their money work harder through economic ups and downs since 1762.

In an age of widespread digital communications, we still believe that getting to know you personally and understanding your aspirations is the key to success. We tailor investment portfolios to your needs and provide a full range of financial planning services to create a meaningful strategy that will meet your financial and lifestyle goals.

With a large office in Newcastle, we have an expert team of investment specialists and financial planners who can help you to develop a sound strategy for managing your financial affairs and safeguarding your long-term wealth.

For more information, please visit www.brewin.co.uk/newcastle


Business & IP Centre NewcastleDeloitte

Deloitte is a leading professional services firm, with an office in Newcastle, which provides audit, consulting, financial advisory, risk management, tax and related services. Its diverse North East client base ranges from owner-managed businesses to multinational corporations.

For more information, please visit www.deloitte.com


Square One LawSquare One Law

Square One Law is an entrepreneurial, commercial law firm, based in Newcastle upon Tyne. The firm offers a wide range of legal services including: banking, commercial, commercial property, corporate, employment, litigation and private client. In 2014 Square One Law was awarded Insider Dealmaker’s “NE Corporate Law Firm of the Year”.

For more information, please visit www.squareonelaw.com

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