It’s always a good idea to take advantage of your annual tax reliefs and allowances wherever you can. This year, though, it’s more important than ever, due to recent changes.
Which key allowances are changing?
Following the Chancellor’s announcement in the Autumn Statement, as of 6 April 2023, the Capital Gains Tax (CGT) allowance was more than halved to £6,000, and it will half again in 2024/25 to just £3,000 a year.
This means that when you sell investments currently, you can only enjoy gains up to £6,000 before you pay CGT.
The Chancellor also set his sights on the dividend allowance. This is the amount you can earn from company shares, including dividends from money held in collective investments such as funds and investment trusts before Dividend Tax is charged.
In the 2022/23 tax year the dividend allowance was £2,000, but as of 6 April 2023 it was halved to £1,000 and will half again to £500 in 2024/25.
Which allowances could I be utilising?
You can shelter your investments from Dividend Tax and CGT by holding them in tax-efficient wrappers, such as a pension or Stocks & Shares ISA.
If you’ve already fully funded your ISA or pension, you could consider a pension for a spouse, child or grandchild, or explore ISAs for your family.
We can help you take advantage of the reliefs and allowances you’re entitled to.
Get in touch for a no obligation consultation
Partner Content in association with C Mearns Finance, carleymearns.co.uk
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