Tax Year Planning  2022 /2023

Your Main Tax Planning Opportunities for this Tax Year

Pensions, ISA’s, IHT and CGT

Dividend Allowance

Tax year-end deadline 5th April – however in reality 30th March is final cut off.

If you have any questions or want to discuss any aspect of your year-end tax planning – please get in touch ASAP.

Below is a summary of the main tax-efficient allowances available.

Pension Planning

You can contribute as much as you like into a pension, however there is a limit on tax relief each tax year.

This is the LOWER of your relevant earnings or £40,000.

Although your employer could make contributions above your relevant earnings.

You could also carry forward any unused allowances from the past three years providing that you have the earnings to support a contribution in excess of £40,000 and you were a member of a pension scheme.

Lifetime Allowance remains £1,073,000.

If you no longer work and you are under 75 you can still contribute £2,880 and the Government will increase this to £3,600 – utilising this allowance usually makes a lot of sense.

You can use this same allowance to contribute for a non-working spouse or a child under 18.

ISA’s

The ISA allowance is £20,000 – use it or lose it!

LISA’s - For those under 40 (or under 50 for existing LISA holders) contribute up to £4,000 and the Government will increase this to £5,000! Restrictions in accessing the funds apply.

Junior ISA’s

For children who do not have a child trust fund, parents can open a JISA and up to £9,000 can be contributed this tax year. 

Gifting for IHT

You can gift up to £3,000 per tax year.  You can carry this forward for 1 year – but after this you lose the allowance. 

In addition to this £3,000 gift you can make as many gifts of £250 as you like (to different beneficiaries)

On the marriage of one of your children you may gift them £5,000 and a grandchild or greatgrandchild £2,500 on anyone else’s marriage the limit is £1,000.

You can also make gifts out of ‘ordinary expenditure’ – but there is no tax year end deadline for this.

CGT Allowance

Currently the allowance is £12,300 (£6,150 for trusts) You can’t carry forward this relief so you may want to crystalise gains before the end of the tax year.

CGT allowance reduces next tax year to £6,000 and the following year (from April 24) to £3,000

Dividend Allowance

Currently up to £2,000 of dividend income is tax free.  Next tax year this reduces to £1,000 and the following year (April 24) it is reduced further to £500.