Five things you should consider before the end of the 21/22 tax year


1. Maximise your ISA allowance

At present, you can put up to £20,000 into a cash ISA or a stocks and shares ISA (or a combination of the two) per person each year. 


If you’re a married couple, you can invest up to £40,000 between the two of you. There’s also an opportunity to take advantage of a Junior Cash ISA which has a separate allowance of £9,000.


You do not pay tax for any income you have earned from investments or interest on cash savings. Therefore, if you sell any investment, the gain made will also be tax-free if held within an ISA.


2. Top up your pension

Contributing to a personal pension is one of the most tax-efficient forms of saving for your retirement. Currently, you can put up to £40,000 a year into your pension and benefit from tax relief. You may also be able to bring forward unused allowances from the previous three years.


For higher earners, it’s important to keep the lifetime pension allowance in mind. The current lifetime allowance is set at £1,073,100. Remember that contributions causing you to exceed the allowance are taxable.


Each time you pay into your pension, you benefit from tax relief on your contributions at the highest income tax rate you pay. For example, if you pay tax at the basic rate of 20%, you will receive 20% tax relief on the money you pay into your pension. For higher earners, the allowance is reduced.


3. Utilise your Capital Gains Tax allowance

For the current tax year, the Capital Gains Tax (CGT) allowance is £12,300. However, if you’re married, you have a combined allowance of £24,600.


Should you decide to sell an asset, such as a property or an investment, £24,600 of the gain made is tax-free for married couples. However, any proportion of gain above your allowance, the sale price minus what you paid for it, is taxable.


4. Gifting to reduce Inheritance Tax

The current tax-free threshold is set at £325,000 for single individuals and £650,000 for married couples. After death, estates valued at £325,000 and above are charged 40% Inheritance Tax (IHT).


To legitimately move money outside your estate without penalty, you can legally gift up to £3,000 per tax year.


You can also back-date the gifting allowance by one year, so if you didn’t use your allowance last year, you could gift up to £6,000 before the end of this tax year. If you’re married or in a civil partnership, you could back-date gifts by up to £12,000.



5. Marriage Allowance

If one person within the marriage is a basic rate taxpayer and the other is a non-taxpayer, you will be eligible for Marriage Allowance.


The non-taxpayer can give their partner or spouse £1,260 of their unused personal tax allowance, saving the taxpayer £252 in tax.


For any unused allowance over the four previous tax years, you can back-date the allowance should you make a claim by Tuesday 5th April 2022.


Need help?

At Imperial Chartered, our independent financial advisers are committed to helping you make the most of your money. 


Please speak with one of our independent financial advisers today on 02921 660 670


*Tax planning (or Inheritance Tax/ Estate Planning) is not regulated by the Financial Conduct Authority*



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*Please Note

“The value of your investments can go down as well as up, so you could get back less than invested”, “A pension is a long term investment. The fund value may fluctuate and can go down” and “Your eventual income may depend on the size of fund when accessed, interest rates and legislation”.

“The Financial Conduct Authority do not regulate tax planning advice”.

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