Newspaper article The Journal (Newcastle, England)

You've Still Got Time to Minimise Tax Burden

Newspaper article The Journal (Newcastle, England)

You've Still Got Time to Minimise Tax Burden

Article excerpt

THERE are just a few weeks of the current tax year left representing a brief window of opportunity for tax reliefs to be used. If they have not already done so, individual taxpayers should be considering whether there is any potential to use the basic reliefs, says STEPHEN HALL.

THE current tax year is fast coming to a close, so now's your last chance to review your position to uncover any unused allowances or other possible benefits, before April 5. If you are entitled to any allowances or benefits, make sure you use them or you'll lose them once the tax year ends.

It is also a good time to consider possible actions to mitigate the 50% tax rate which will apply from April 6. Here are a few tips to start with: Personal allowances Maximise income tax rate bands - make a gift to a spouse to make use of his or her personal allowance (pounds 6,475) and basic/lower rate band (pounds 37,400) for 2009/10.

Capital gains tax (CGT) - make use of the annual exemption for 2009/10. If already used, you can consider delaying the disposal until 2010/11.

Inheritance tax - make use of the AE for 2009/10 of pounds 3,000 each for husband and wife, plus any unused balance from 2008/09, and the small exemption of pounds 250 in relation to individuals. Also, make use of this tax year's pounds 325,000 nil rate band.

Individual Savings Accounts (ISAs) - make use of the yearly ISA allowance.

Pensions Consider making a pension contribution. However, great care should be taken, as higher rate relief may not be available.

Lifetime allowance - for the 2009/10 tax year, the limit on the value of retirement benefits that you can accumulate in a UK registered pension scheme before tax penalties apply is pounds 1.75m.

From April 6, 2011, higher rate tax relief on pension contributions will be gradually phased out for individuals with gross incomes of at least pounds 150,000, so that for those with gross incomes of more than pounds 180,000 tax relief will be restricted to the basic rate.

Anti-forestalling measures were introduced from April 22, 2009 imposing a special annual allowance charge in 2009/10 and 2010/11 on certain contributions in excess of an individual's normal ongoing savings pattern. …

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