YEAR-END TAX PLANNING 2024-25

Individual Savings Accounts (ISA)
Your annual ISA allowance is £20,000, and this can be invested in a cash ISA, a stocks and shares ISA, or a Lifetime ISA (LISA), or any combination of the three within the annual allowance. You can invest up to £4,000 per annum in a LISA and the government will add a 25% bonus, up to £1,000. You must start the LISA before the age of 40, and you cannot contribute after the age of 50. The funds must be used to purchase your first property of up to £450,000.

Pension contributions
Contributions to a personal pension attract tax relief at 20%. So a contribution of £800 is topped up to £1,000 by a tax rebate to the pension scheme. If you are a 40% taxpayer, then you will receive further tax relief of 20% through your Tax Return.
If your income falls in the range from £100,000 to £125,140 then you will lose £1 of your personal allowance for each £2 of income above £100,000. By paying into a personal pension you can restore all or part of your personal allowance, which further enhances the effective tax relief.
There are limits to the contributions you can make. You can contribute the lower of the annual allowance of £60,000 and your earnings. Earnings means your salary or self-employed profits or partnership profit share, but excludes rental or investment income. The annual allowance is restricted if your income exceeds £260,000.

Capital gains tax (CGT)
You should consider realising capital gains before 5 April 2025 if you have not used your £3,000 annual CGT exemption for 2024-25.

State Retirement Pension (SRP)
You can check your entitlement to SRP by opening a Personal Tax Account. You need 35 qualifying years to get the full SRP. You can plug any gaps as far back as 2006 by paying Class 3 (Voluntary) contributions. This concession lasts until 5 April 2025, after which you will only be able to go back 6 tax years.