By Katherine Bullock
I’m sure that for many of you the 5 April and the end of 2013/14 tax year, came and went without much excitement. However, the new tax year brings with it exciting new opportunities, renewed allowances and a fresh chance to revisit your financial and tax planning.
I wanted to highlight some of these opportunities to you all so you can start to effectively plan for the new tax year.
The income tax personal allowance has increased to £10,000; so if you are a basic rate tax payer you will have an extra £112 in the bank.
For those of you thinking of selling any assets in the coming year, you will be pleased to hear that the capital gains tax annual exemption has also been increased to £11,000.
Remember, for married couples or civil partners, ownership of capital assets or income bearing assets may be transferred from one party to the other, at nil gain or loss, with the result that there is a better use of any unused basic/higher rate bands.
The ISA allowance has increased to £15,000, although you will need to hang fire as this increase comes into effect on 1 July 2014. You can now choose what combination of cash or stocks and shares you hold with your £15,000. George Osborne has also decided to include peer-to-peer lending within tax-free ISAs which adds an interesting new option for those of you who would like a little more risk, and potentially a little more reward, than the standard cash ISA.
There is a growing range of tax efficient investments on offer this year, with the announcement of social investment tax relief, to add into the mix of the usual EIS, SEIS, and VCT. These schemes all work in a broadly similar way, giving income tax relief on investments made in organisations which are registered under one of the schemes. You may also be able to benefit from capital gains tax relief if you roll over any gains made into your investment.
If you would like any more information regarding any of the above, or more generally your tax planning for this new tax year, please do get in touch.