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Four items for your to-do list prior to the end of the tax year



Adam financial checklist for the end of the tax year.

2 min read

As the end of the tax year approaches, now is a good time to focus on your finances.

The 2018/19 tax year ends on 6 April. Here are four things we think should be front of mind to help you get your finances in order.


1. Make the most of your ISA allowance

You can invest up to £20,000 this tax year in a stocks and shares ISA and pay no UK Income Tax or Capital Gains Tax on your ISA returns.

It’s worth remembering that you can only subscribe to one stocks and shares ISA per tax year.


2. Make the most of your pension allowance

Pensions are another tax-efficient way to invest.

You can get tax relief on contributions up to the annual allowance, which is £40,000 for the 2018/19 tax year. So, if you are currently making contributions of £20,000 a year into a pension scheme, you could be eligible for tax relief on a further £20,000 of pension contributions this year.

There are some limits on the annual allowance. For example, you can only get tax relief on contributions up to your annual qualifying earnings in any one year. So if you have qualifying earnings of £20,000 you’ll only be eligible for tax relief on £20,000 of pension contributions. Qualifying earnings include things like salary and bonuses, but don’t include things like dividend income or capital gains. If you have low – or no – qualifying earnings, there is a minimum annual allowance that means you may be able to get tax relief on pension contributions of up to £3,600 a year.

If you earn over £150,000 the amount of contributions you can receive tax relief on is reduced on a sliding scale. The minimum allowance is £10,000 for earnings over £210,000 a year.

In addition, you don’t get tax relief on contributions after you turn 75.

It is important to make sure that you claim the appropriate amount of tax relief on your contributions. If you’re uncertain about how much you can contribute you should get financial advice.

You should also bear in mind that pensions are intended for later in life, typically to provide a replacement income as you retire. This means that you usually can’t access your savings before you turn 55 (57 from 2028) and the tax treatment depends on how you withdraw your pension savings.

“Utilise your ISA allowance by investing up to £20,000 free from UK Income or Capital Gains Tax on your ISA returns.”

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3. Think about giving to charity

Charitable donations are their own reward. But if you’re thinking about making a large donation in the near future, it could make sense for you to make it before the end of the tax year.

Gifts of cash can reduce your income tax bill for the tax year – and in some cases the previous tax year. You can also donate listed investments or property free of Capital Gains Tax, while also reducing your Income Tax liability.

Considering tax efficiency when you’re giving to charity is a way of making the biggest impact with your donations. For example, many clients set up a charitable foundation. This can maximise the amounts that are paid to the charities they support, while also providing a structure for their giving and involving the family in their charitable activity.

Speak to your private banker if you would like to find out more about setting up your own charitable foundation.


4. Review your will

While not specifically related to the end of the tax year, this is also a good time to consider your will. After you review your investments and philanthropic plans, you might also want to think about:


  • Ensuring your estate is distributed in accordance with your wishes
  • Maximising the estate passing under your will
  • Keeping your wishes private


Tax reliefs referred to are those applying to UK residents under current legislation, which may change. The availability and value of any tax reliefs will depend on your individual circumstances

When investing, past performance should not be taken as a guide to future performance. The value of investments, and the income from them, can go down as well as up, and you may not recover the amount of your original investment.

Key Takeaways

Now is a good time to look at how your money has been working for you in the past year and to make sure you are prepared for the upcoming financial year. Questions for the end of the tax year include, have you utilised your annual ISA allowance, maximised your pension contributions, made charitable contributions and checked that your will is up to date?

About Adam Financial Planning

We help our clients to align their finances to current and future, personal or business needs. We take advantage of current market opportunities spanning tax efficient products or services. As a recognized Corporate Chartered status business, you can have confidence that you are dealing with qualified professional practitioners who provide a high quality of financial planning advice.

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