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As we gear up for the tax year-end on 5th April, it's time to unlock the potential of tax-free allowances available at your fingertips. From pension perks to capital gains treasures, there's a wealth of opportunities waiting to supercharge your tax savings.
At Derbyshire Accountants Ltd, we're dedicated to helping you navigate the complexities of taxation and optimise your financial strategies. Let's explore the avenues of tax-free allowances together to ensure you're making the most of every opportunity.
Your personal allowance serves as the foundation of tax-free earnings, covering the initial £12,570 of income. Additionally, up to £1,000 of dividend income enjoys tax-free status, providing further scope for savings. Basic and higher rate taxpayers can also benefit from tax-free interest on the first £1,000/£500 (respectively).
The capital gains tax annual exempt amount presents a valuable opportunity, currently set at £6,000. However, this allowance is going to decrease to £3,000 per annum from April 2024, making timely action imperative to maximise savings.
With tax allowances undergoing adjustments, it's more important than ever to leverage these opportunities effectively. By maximising your tax allowances, you can mitigate your tax liability and bolster your financial security.
An Individual Savings Account (ISA) remains a cornerstone of tax-efficient investing, offering shelter on interest earned for up to £20,000 of savings annually, while children can have a Junior ISA with a maximum of £9,000.
Pension contributions also provide significant tax benefits, enabling you to reduce your tax liability while saving for the future.
Salary sacrifice offers a strategic means of reducing income tax and National Insurance contributions while enhancing pension savings. This method can be particularly advantageous for individuals approaching higher tax thresholds or seeking to optimise their tax position.
As the end of the tax year approaches, now is the time to review your financial arrangements and capitalise on available tax-free allowances.
Ready to optimise your tax-free allowances? Contact me at charlotte@derbyshireaccountants.com. to schedule a consultation and take control of your financial strategy
Charlotte Derbyshire
Chartered Certified Accountant
Director of Derbyshire Accountants Ltd
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