Lamont Pridmore says there are big savings to be made
One of Cumbria’s leading accountancy firms Lamont Pridmore is calling on individuals to review their investment and pension plans to make sure they are making the most of the opportunities on offer.
As the country approaches the end of the tax year on 5 April 2020, savers must take full advantage of the allowances and reliefs on offer.
A wide range of tax-free allowances are available, including the £2,000 dividend allowance, the £12,000 capital gains tax annual exemption, £40,000 annual pension limit and the £20,000 ISA savings allowance.
The full list of reliefs and allowances is dauntingly huge and optimising the use of these allowances is fraught with complexity and opportunities to make errors.
Depending on an individual’s circumstances, it can be worth either bringing forward or deferring dividend payments from a company to make the best use of the dividend allowance this year and next year.
Similarly, deciding which tax year in which to dispose of an asset that is subject to capital gains tax can make a big difference to the overall tax rate.
There is also a wide range of allowances relating to pensions and savings that can further optimise a person’s tax position, as well as specialist reliefs for married couples.
In particular, individuals can save up to £40,000 a year towards their pension tax-free, but many fail to realise that unused allowances in previous years can be carried forward so that more can be saved in a single year.
Graham Lamont, Chief Executive at Lamont Pridmore, said: “At this time of year we all think about our New Year’s resolutions, but It is also a good time to start planning your tax affairs before the end of the tax year on 5 April.
“An obvious tax planning point for most individuals would be to maximise their ISA allowances for the 2018/19 tax year, which currently sits at £20,000 per person.
Chris Lamont, a Partner at Lamont Pridmore, added: “There is a myriad of reliefs available to taxpayers to help them maximise their income each year and with a Budget just around the corner, the Government is likely to announce several changes that could make certain forms of saving more lucrative.
“That is why it makes sense to seek out professional guidance before the end of the tax year and have your finances reviewed.”