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Time to plan for the new tax year is now, says TWP

Surrey accountancy firm TWP is calling on individuals to look at minimising their exposure to rises in taxes and falls in certain allowances before the new tax year in April.

With a variety of changes to personal tax on the horizon, the firm is calling on taxpayers across the region to take advantage of the various reliefs and allowances on offer.

For example, taxpayers can get tax relief on private pension contributions thanks to the £40,000 annual tax-free pension allowance, which can be rolled over several years to reduce upcoming tax bills by reducing taxable income.

Rising house prices also mean many more individual’s estates are moving over the current Inheritance Tax (IHT) threshold.

For most taxpayers, this is an initial nil-rate band allowance of £325,000 and an additional residence nil-rate band of £175,000, where a property is passed to a direct descendent.

To reduce a potential IHT bill, many families can consider making regular gifts throughout a person’s lifetime to reduce the size of the estate, according to

“While gift-giving is subject to certain rules, with careful planning it can be one of many ways of reducing tax liabilities within an estate,” said Emma Croft, Private Client Tax Manager at TWP.

“Similarly, with pensions, they can be a method of minimising income tax, but they should form part of a wider plan that looks into every aspect of a person’s financial life.”

Emma said that savers should also be advised to take advantage of their annual £20,000 annual ISA allowance.

“With personal tax allowances frozen until 2028, a reduction to the income tax additional rate threshold and rapid income and wage inflation, many taxpayers need to plan carefully to avoid shock tax bills in future,” added Emma.

“There is a wide range of reliefs and allowances provided to taxpayers that can help minimise a person’s liabilities so that they can keep more of what they earn and pass more wealth to future generations.”

To find out how TWP can help you make the most of your personal tax allowances, please contact us.