Investments & Inheritance Tax Planning: Keeping More in the Family

Why inheritance tax matters

Inheritance tax is charged at 40% on estates worth more than the current allowances. For many families — particularly those who own property or have built up sizeable investments — it’s a real issue. Without planning, a large chunk of your wealth could end up going to HMRC instead of your loved ones.

Where investments come in

A balancing act

Why take advice?

The post Investments & Inheritance Tax Planning: Keeping More in the Family appeared first on Alice Douglass.

As the end of the tax year draws near, it’s time to put your financial house in order. While it might feel like a bit of a chore, getting your finances in shape before the tax year end is not only smart—it can also save you a significant amount of money. In this blog, we’ll walk you through some top tips for financial planning and why you should pay attention to the tax year-end deadlines. Think of it as a spring clean for your finances!

Why Is the Tax Year-End Tax Planning So Important?

In the UK, the tax year runs from 6th April to 5th April the following year. The end of the tax year marks a crucial point in time when your financial situation is assessed, and the actions you take before the 5th of April can have a huge impact on your tax liabilities.

So, why should you care? Well, making sure your finances are in order could help you reduce your tax bill, boost your savings, and ensure you’re maximising the allowances available to you. Plus, it’s a chance to take stock of your overall financial health—something we can all benefit from!

Top Tips for Financial Planning Before the Tax Year-End

1. Use Up Your ISA Allowance

Individual Savings Accounts (ISAs) are a fantastic way to save tax-free, so it’s important to make sure you’re using your full allowance. For the 2025/26 tax year, the ISA allowance is £20,000 per person. If you don’t use it by the 5th of April, you’ll lose it—so why not make the most of this opportunity?

You can choose between a Cash ISA, Stocks & Shares ISA, or an Innovative Finance ISA, depending on your financial goals and risk appetite. Just be mindful of the deadline, and don’t leave it until the last minute!

2. Consider Contributing to Your Pension

One of the best ways to reduce your taxable income is by contributing to your pension. Pension contributions come with tax relief, so if you’re looking to reduce your tax liability, this is a strategy worth considering. You can contribute up to £60,000 per year into your pension (or 100% of your earnings, whichever is lower), but be aware of the rules around annual allowance and the carry-forward option if you haven’t maximised contributions in previous years.

The end of the tax year is a great time to boost your pension pot if you’ve got the means to do so. After all, you’re not just saving for your future, you’re saving on your taxes, too!

3. Make Use of Your Capital Gains Tax Allowance

Every tax year, you’re allowed to realise up to £3,000 worth of capital gains before you have to pay any tax on them (for the 2025/26 tax year). If you’ve made any profits from selling investments, property, or other assets, consider selling them before the tax year-end to make use of your annual exemption. You could also think about transferring assets to a spouse or civil partner, as they have their own allowance.

By carefully planning your asset sales, you can reduce your overall capital gains tax bill and keep more of your hard-earned money.

4. Review Your Tax Code and Check for Errors

It might sound tedious, but reviewing your tax code can help you avoid paying more tax than necessary. Mistakes happen, and your tax code could be wrong without you realising it. If you think something’s amiss, get in touch with HMRC before the year ends to get it sorted. The sooner you spot an error, the quicker you can rectify it and avoid overpaying.

5. Charitable Donations: A Win-Win

If you’re feeling generous, making charitable donations before the end of the tax year can also be a clever way to reduce your tax bill. Donations to charity are tax-deductible, and if you’re a taxpayer, you can claim Gift Aid on top of that.

You could donate to a cause close to your heart, and at the same time, benefit from a reduction in your taxable income. It’s a win-win!

Other Tips

Keep Track of Your Business Expenses

For those running a business, the tax year-end is a great time to take stock of any business expenses you’ve incurred. Be sure to claim all allowable expenses for the year, as they will reduce your taxable profit and, therefore, your tax bill. Think office supplies, travel expenses, or any work-related purchases. Keeping detailed records throughout the year will make this process far easier when it comes to tax time.

Organise Your Documents

As you prepare for the end of the tax year, it’s crucial to get your paperwork in order. Gather all relevant documents, such as your P60, P45, payslips, bank statements, and receipts for any business expenses. Having everything in one place will help you stay on top of your finances and make filing your tax return much smoother.

Start Early: Avoid the Last-Minute Rush

As tempting as it is to put things off, starting early can save you a lot of stress in the long run. Procrastination can lead to missed deadlines, rushed decisions, and potentially lost opportunities. Set aside some time each week leading up to the 5th of April to ensure you’re on top of everything.

Final Thoughts on Year-End Tax Planning: Get Ahead of the Game!

The end of the tax year is a great opportunity to reassess your financial situation, maximise your allowances, and reduce your tax bill. By following the tips above, you’ll not only be better prepared for the year ahead but also take advantage of opportunities to save money.

Financial planning doesn’t have to be overwhelming—just a little organisation can go a long way. So, why not get a head start and make sure you’re ahead of the game before the 5th of April? Your future self will thank you!

Do you have any tips for making the most of the tax year-end? Share your thoughts in the comments!

Get in touch here if you could benefit from the expertise of a friendly financial adviser.

The post Financial Planning and Year-End tax planning: A Guide to Getting Organised appeared first on Alice Douglass.

If you’re planning to offer a substantial amount of money as a present this year, either to a young family member or an adult, you could be feeling excited about the difference this money could make to their lives. 

But before you bestow a financial gift, it’s essential to learn how you can make these tax-efficiently, in order to help avoid an increased tax burden for either you or the recipient of the gift. 

Keep reading to learn about two tax-efficient options for giving financial gifts this Christmas. 

1. Make savings on behalf of your child or grandchild

You may be accustomed to putting cash in an envelope for the children in your family at Christmas. But if you are looking to offer an under-18 loved one a more substantial financial gift this year, paying into a savings account or pension on their behalf could be the ideal way to transfer wealth tax-efficiently. Here are two possible routes to consider.

Starting a Junior Individual Savings Account for your child or grandchild

Starting a Junior Individual Savings Account (JISA) could be the ideal way to offer wealth to the next generation while potentially reducing their tax burden later. 

As of the 2025/26 tax year, JISAs:

• Can receive a maximum deposit of £9,000 a year
• Are “tax wrappers”, meaning any gains made are usually free from Income Tax and Capital Gains Tax (CGT)
• Can be controlled by your child when they reach 16, but the funds can only be accessed once they reach adulthood.

Setting a child up with a pot of money they can access later may be life-changing for them. They could use it to help fund a university course, spend it on an unforgettable travel experience, or simply keep it saved up for when they need it later.

Paying into a pension on a child’s behalf

Alternatively, you could pay into a pension on behalf of your child. Although they may not fully appreciate this financial gift now, the compound returns this account might receive over the decades to come could be substantial.

Indeed, Investors’ Chronicle reports that “£300 a month invested between a child’s birth and age 18, assuming 20% basic-rate tax relief on contributions, investment growth of 5%, and charges of 1%, would grow to £581,240 by the time they reach 65”.

Even if you only make a single one-off payment into a Junior self-invested personal pension (SIPP) or a similar account this Christmas, this money is likely to grow over the course of their life.

As of the 2025/26 tax year, you can pay up to £2,880 net (£3,600 gross) into a pension fund for a child or grandchild under 18 while benefiting from tax relief. If the child receives earnings, you can pay tax-relievable contributions of up to £60,000 a year, or 100% of the child’s earnings, whichever is lower.

Ultimately, this type of gift may not replace the money-in-the-envelope tradition that is typically adhered to at Christmas, but if you’re looking to give a little extra to the young people in your life, these two options could be a great place to start.

2. Offer financial gifts that remain within your annual exemption

If you have adult children and wish to simply transfer them a sum of money as a financial gift this Christmas, it’s important to keep your annual exemption in mind. This could help your beneficiaries to pay a lower Inheritance Tax (IHT) bill later on.

Your annual exemption is the amount you can give away tax-efficiently each year, and as of the 2025/26 tax year, it stands at £3,000. If you wanted to give money to more than one person this Christmas, you can split your annual exemption among as many recipients as you like.

Crucially, if you give more than £3,000 away in one tax year (or £6,000 between yourself and your spouse or partner), and you were to pass away fewer than seven years after the transfer was made, the amount in excess of the annual exemption could still make up part of your estate for IHT purposes. 

In other words, gifts above £3,000 are not necessarily tax-efficient in all cases, but if you keep financial offerings within the annual exemption, this gift is unlikely to affect your or your child’s tax bill. 

Plus, while giving a large sum as a one-off can be life-changing for the recipient, this Christmas could be a great opportunity to begin “giving while living”. If you know that you can afford to support yourself comfortably for the rest of your life, it could be wise to begin reducing the value of your estate now, in order to reduce the amount of IHT your loved ones could pay later on.

Get in touch

If you’d like to learn more about saving on behalf of a child, giving while living, or the annual exemption, get in touch.

Email me at a.douglass@grosvenorconsultancy.co.uk or call my office on 01793 766 123. 

Please note

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

All contents are based on our understanding of HMRC legislation, which is subject to change.

The Financial Conduct Authority does not regulate estate planning, tax planning, or will writing.

The post 2 helpful ways to give tax-efficient financial gifts this Christmas appeared first on Alice Douglass.

Typically, people tend to invest or take action with their finances towards the end of a tax year, meaning that February and March are extremely busy. This is largely driven by fears that certain benefits, such as the ISA allowance, will be lost if it’s not used by the end of the tax year, as it cannot be rolled over into the next one.

If you tend to invest at the end of a tax year, you may inadvertently be damaging your wealth. Investing in April or May could expose your money to greater growth potential and allow it to enjoy more tax benefits – both of which could help to boost your wealth.

So, if you’re wondering: “Should I invest at the start of a new tax year?”, read on to discover three clever reasons why you may need to consider it.

1. It could increase your investment’s growth potential

Investing earlier in the tax year means that your money is invested for longer, which in turn could expose it to greater growth potential. This may help to boost your money’s long-term wealth. 

To demonstrate this, you may want to consider an article by Investor’s Chronicle, which provides food for thought. It used data from the MSCI World Index, which tracks the performance of a basket of companies across 23 developed markets.

It reveals that if you had invested £20,000 at the beginning of the tax year for 10 years leading up to April 2021, your investment would have been worth £356,353. If, however, you had invested at the end of each tax year it would have been worth £329,316 – a drop of £27,037. 

Please note, the calculations are for illustrative purposes only, and don’t consider the effects of charges on any investment. It also assumes that £20,000 was put into the ISA every year, even though the ISA allowance was lower in some years.

Even so, it illustrates that investing earlier in the tax year could be something you want to consider as it may help boost your money’s growth potential. Always remember though, past performance does not guarantee future performance.

2. Investing in an ISA could mean more tax-free cash to spend

As you can see, investing early in the tax year could help increase your money’s potential growth. That said, you may also be able to enjoy a higher level of growth potential in a much more tax-efficient way.

Investing in a Stocks and Shares ISA in April or May means that any growth your money enjoys will not typically be liable to Capital Gains Tax (CGT). This might be particularly attractive when you consider that the CGT annual exempt amount is £3,000 (2025/26 tax year). Any amount you then take from your Stocks and Shares ISA as income will typically be tax-free. 

Investing early in a Stocks and Shares ISA early not only means that your money could enjoy greater tax-efficient growth potential, but it also ensures you retain the annual exempt amount. This could then be used to reduce exposure to CGT if you have other assets which could be liable to the tax. 

In 2025/26, you can contribute up to £20,000 into a Stocks and Shares ISA. If you would like to learn more about the benefits of investing in a Stocks and Shares ISA earlier in the tax year, please read my blog about them.

3. Contributing early could boost your retirement lifestyle

A defined contribution pension (DC) – otherwise known as a money purchase pension scheme – is an investment as it holds a range of assets including stocks and shares. With this in mind, the above Investors Chronicle example demonstrates how contributing into your pension scheme earlier in the tax year could help increase its value over time.

This could be further enhanced by the tax relief pensions typically receive. As a 20% basic-rate taxpayer, every £100 you place into your pension costs you just £80 in 2023/24. If you’re a higher-rate taxpayer it will cost just £60, and additional-rate taxpayers may pay £55.

This means that the more you contribute, and the longer you contribute for, the greater the tax relief you receive. In other words, the government effectively puts more money into your pension, which could help to boost its value over time. 

As a result, you may be able to enjoy a better standard of living or finish work earlier.

Please remember that the level of contributions that receives tax relief is typically limited to your Annual Allowance. This equates to £60,000 or the amount you earn, whichever is the lower (2025/26 tax year).

Get in touch

If you’re considering: “Should I invest at the start of a new tax year?” and would like to discuss why it may be the best policy for you, please email me. I can be contacted at a.douglass@grosvenorconsultancy.co.uk or by calling 01793 766 123. Alternatively, you can reach me on my mobile, which is 07525 177 046. 

Please note that while I offer high standards of service and ensure that any solution I recommend is right for you, I’m also a busy mum, so work Mondays and Tuesdays only.

Please note

This article is for information only. Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

Tax levels and reliefs could change and the availability of tax reliefs will depend on individual circumstances.

A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits. The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation, and regulation, which are subject to change in the future.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

The post 3 clever reasons investing at the start of a new tax year could boost your wealth appeared first on Alice Douglass.

It would be fair to say they didn’t achieve this, and it wasn’t long before Mr Kwarteng was replaced by Jeremy Hunt, who went on to reverse almost all of his predecessor’s tax plans. In November, Mr Hunt announced his long-anticipated Autumn Statement, which saw even more changes.

This included extending the freezing of the Income Tax and Inheritance Tax allowances to April 2028, and reducing the additional-rate threshold from £150,000 to £125,140. Furthermore, the Dividend Tax and Capital Gains Tax exempt amounts have also be significantly reduced over the last two tax years.

As a result of these, Sky News reported, millions of Britons could soon be facing higher tax bills. If you’re wondering: “how can I reduce the amount of tax I pay?”, read on to discover six clever ways to make your money more tax-efficient.

1. Use pension contributions

Pensions are not only a way to save for the retirement lifestyle you want, they’re also a very tax-efficient way to put money aside. This is because the government typically gives you tax relief on the money you use to make contributions to your retirement fund.

Because of this, every £100 you place into your pension costs you just £80 if you’re a basic-rate tax payer (2025/26). If you’re a higher-rate taxpayer it will cost just £60, and as an additional-rate taxpayer, you may only pay £55.

While you can contribute as much money as you like into your pension, the amount that receives tax tax-relief is limited to your Annual Allowance. In 2025/26, this is typically the amount you earn or £60,000 a year, whichever is the lower. If you’re a high earner your Annual Allowance may be £10,000. 

Subject to your Annual Allowance, the more you contribute to your pension the more relief you get, which means increasing your contributions could be a very shrewd way to be more tax-efficient. 

2. Consider donating to charity

When you make a donation to a charity using Gift Aid, the charity or sports organisation you’ve donated to is allowed to claim basic-rate tax relief on your donation. As such, if you’re a higher- or additional-rate taxpayer you can also claim the difference as additional tax relief. 

3. Maximise your use of ISAs

While ISAs may not provide immediate tax relief on your cash, they can provide significant benefits over the long-term. This is because they are not liable to Income Tax when you withdraw money from them, or CGT on any increase in value the ISA makes. 

In 2025/26, you can invest a total £20,000 a year into an ISA. 

Placing your cash into a Stocks and Shares ISA could expose it to greater growth potential, which would typically be free of CGT. With this in mind, you might want to consider research by Schroders, which found that between the start of 1952 and the end of May 2022, UK equities returned 11.7% a year on average. Cash returned 6% a year. 

Always remember, past performance is no guarantee of future performance.

4. Use Enterprise Initiative Schemes and Venture Capital Trusts

As Enterprise Initiative Schemes (EIS) and Venture Capital Trusts (VCTs) support young companies, the government offers tax incentives including a 30% reduction on your Income Tax bill – up to certain limits.

This could help you reduce your liability by up to £300,000 if you invest into an EIS, or up to £60,000 if you place money into a VCT. Furthermore, with VCTs, you could enjoy potential growth that’s CGT-free. 

As VCTs and the EIS are classed as high-risk investments, always speak to a financial planner to ensure they’re right for you.

5. Use Rent-a-Room relief

If you are considering renting a room out in your home to help with the surging cost of living, you could receive up to £7,500 in rent a year tax-free (2025/26). To claim the relief, your home must be fully furnished and you must live in the property as well. 

If you own the property with someone else, you can claim £3,750 each.

6. Use your CGT annual exempt amount

The CGT annual exempt amount is now £3,000 (2025/26). 

Thinking strategically about how you dispose of assets could significantly reduce your exposure to CGT. For example, you may want to consider sharing ownership of an assets with your spouse, as this means it would benefit from both of your allowances – effectively doubling it to £6,000

Any gain above the allowance would then be liable to CGT at between 18-32% (2025/26), depending on the asset you have sold and your marginal rate of tax.

Get in touch

While the above could help you reduce your tax liabilities, it is not an exhaustive list. As such, a financial planner could identify other ways you could reduce your tax liabilities.

If you would like to discuss how you could reduce your tax bill, please email me on a.douglass@grosvenorconsultancy.co.uk or telephone 01793 766 123, and I’ll be happy to help. Alternatively, call my mobile on 07525 177 046. 

Please note that while I offer high standards of service and ensure any solution I recommend is right for you, I’m also a busy mum, so work Mondays and Tuesdays only.

Please note

This article is for information only. Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

EIS and VCTs are higher-risk investments. They are typically suitable for UK-resident taxpayers who are able to tolerate increased levels of risk and are looking to invest for five years or more. Historical or current yields should not be considered a reliable indicator of future returns as they cannot be guaranteed. 

Share values and income generated by the investments could go down as well as up, and you may get back less than you originally invested. These investments are highly illiquid, which means investors could find it difficult to, or be unable to, realise their shares at a value that’s close to the value of the underlying assets. 

Tax levels and reliefs could change and the availability of tax reliefs will depend on individual circumstances.

The post 6 clever ways to reduce your tax bill and have more money appeared first on Alice Douglass.

Married tax allowance

The marriage allowance started on 6th April 2015. It permits a spouse or civil partner who doesn’t pay income tax to transfer up to £1,260 of their personal tax-free allowance to their partner. But if that partner is a higher-rate taxpayer, earning more than £50,270 a year, the couple will be excluded from the tax break.

By transferring the personal allowance, it reduces their tax by up to £252 in the tax year. To benefit as a couple, the lower earner must have an income of £12,570 or less. The recipient must be a basic rate taxpayer. Claims may be back dated, so many could get last year’s AND this year’s allowance.

Pensions

If you are married and have a final salary pension, this could pay up to 50% of the pension income to your spouse or civil partner upon your death. Most final salary scheme pension’s scheme rules stipulate that the benefit can only be paid to a spouse, civil partner or sometimes a financial dependent. Therefore, if you are cohabiting, they will not necessarily provide this benefit.

Inheritance tax

Currently, Inheritance Tax is 40% of assets value above £325,000. Therefore, if someone died with an estate valued at £500,000, they would have an IHT bill of £70,000 (£500,000 – £325,000 x 40%). One of the biggest (financial) advantages to being married is the ability to pass on assets after your death without incurring inheritance tax.  If you are married or in a Civil Partnership, all assets can be passed to the surviving spouse without any inheritance tax liability. Moreover, on the death of the surviving partner, they can utilise both IHT allowances. Therefore, having an allowance of £650,000 before IHT is applied.

In addition to this, the Residence Nil Rate Band is applied when the main residence is passed on death to a direct descendant. The allowance is £175,000.

Like the £325,000 threshold, any unused additional nil-rate band will be able to be transferred to a surviving spouse or civil partner. Therefore, as per the following example, some couples could qualify for £1,000,000 IHT free. For more details on this, please refer to my previous Blog “Inheritance tax – where death and taxes sometimes go hand in hand”.

Inheritable ISA

On 6th April 2015, rules came in so that upon death, the deceased spouse or civil partner can inherit their ISAs, which will retain their tax advantageous status. Previously, the ISA wrapper would be removed, and the money would then be exposed to tax. This change thus saves the recipient money.

Conclusion

Although there are some significant tax and pensions advantages to marriage, they are often applicable to the older population and to those who have built up their wealth. And despite these financial advantages of marriage, I still believe the number one reason for marriage should be love (I just hope I won’t need to be referring to my blog “Pensions and Divorce” at any point in the future).

Tax rules, rates and allowances are all subject to change and are dependent on individual circumstances. The Financial Conduct Authority does not regulate tax advice and some forms of offshore investments. The value of investments and the income from them can fall as well as rise, and you may not get back the full amount you invested.

The figures quoted are correct as at the 2025/26 tax year.

The post The Financial Advantages of Marriage appeared first on Alice Douglass.

This article will look at those benefits.

Invest early in the tax year

Investing in a pension or an ISA early in the tax year could give you an additional 12 months of investment returns.

If we look at this in the context of the FTSE 100, a period of 10 years with a cumulative return of 68% would equate to 6.8% per annum if we take the average return. This would amount to growth over 12 months of £1,360 a year based upon a £20,000 investment into an ISA.  Or £2,720 if you invested £40,000 into a pension. In reality, the return could be more or much less than this over one year.

Where I have clients who have money invested within a General Investment Account (often called OEICs), I may recommend that we move £20,000 out of the investment where there are no overt tax advantages into their ISA to utilise the allowance and have an additional 12 months of tax-free returns. ISAs are free from Capital Gains and Income Tax, unlike GIAs and OEICs.

It is worth noting that there is no guarantee that investments will generate positive returns, and values could fall as well as rise.

Invest Regularly

If you cannot afford to make a one-off payment at the beginning of the tax year, or even if you can, it may be a good idea to make regular payments into an ISA or Pension.

By doing this, you not only miss the tax year-end panic, but you can also benefit from something called pound cost averaging. Pound cost averaging means that as the markets move up and down, investing on, say, a monthly basis, can smooth out the impacts of sudden stock market movements because you buy shares at different prices. When the value is down, you buy more for your money, and when the markets are high, the converse is true. Thus, it averages out the price you pay to invest in the stock market over time.

This avoids investing a large sum before a possible market fall, where the loss would be keenly felt. By investing smaller amounts at regular intervals, market falls will have less impact and mean that the contributions can buy more shares for the same money.

It is worth noting that there are limits to the amount you can pay into a pension and an ISA. The ISA allowance for 2025/26 is £20,000. For more details on the amount you can pay into a pension, read my previous blog here or seek financial advice.

Conclusion

To plan your finances early and avoid the last-minute rush, contact me for a no-obligation, complimentary initial meeting.

Tax rules, rates and allowances are all subject to change and are dependent on individual circumstances. The Financial Conduct Authority does not regulate tax advice and some forms of offshore investments. The value of investments and the income from them can fall as well as rise, and you may not get back the full amount you invested

The post New tax year – now is the time to do your Financial Planning appeared first on Alice Douglass.

Gifting Annual Exemptions

Each tax year, there is an “annual exemption” that enables you to make a gift that will be outside of your estate immediately and will therefore not incur inheritance tax. Moreover, these gifts do not have the “7-year rule” applied to them. The amount you can gift in cash or assets each tax year is £3,000. Anything over this amount would have the seven year rule applied and therefore may be subject to inheritance tax. If you have not used your previous year’s annual exemption, you can carry this forward to the current tax year, and therefore, you could gift £6,000 in one tax year; however, you cannot carry more than one year’s allowance forward.

By gifting £3,000 per year, after 10 years, this would save £12,000 inheritance tax.

There are circumstances where you can gift more, such as on the marriage of a child. To read more, click here.

Not everyone will be subject to inheritance tax; therefore, seek financial advice.

Capital gains

Each year, you have a Capital Gains Tax Allowance. This year 2025/26 the allowance is £3,000. This means that on the sale of assets (e.g. a 2^nd home, some investments), you are allowed a gain of £3,000 before any tax is applied.

Other allowances

There are other allowances that are linked to each tax year. These are more niche investments which are deemed high risk and are not suitable for everyone.

Venture Capital Trusts (VCTs) provide income tax relief up to 30% with tax-free dividends and CGT relief. The maximum subscription this (2025/26) and next tax year is £200,000.

Enterprise Investment Schemes (EIS). Also provide income tax relief at 30% and CGT relief. The maximum subscription is £1,000,000 for this and the next tax year.

The tax year-end is a significant cut-off in Financial Planning. These allowances, if not used, will, on the most part will be lost. I work with my clients to ensure utilising these allowances is not left until the very end of the tax year. However, if you haven’t utilised these allowances, you may want to speak to a Financial Adviser pretty sharpish and do something before 6th April.

The post Tax year end planning – Gifting, CGT and other allowances appeared first on Alice Douglass.

Who needs to complete a tax return?

You will need to complete a tax return if in the last tax year* any of the following was applicable to you:

• you were self-employed
• you got £2,500 or more in untaxed income, for example, in tips or rental income
• your income from savings, investments or dividends from shares was more than £10,000 before tax
• you made profits from selling chargeable assets, e.g. a second home, shares, or other chargeable assets and need to pay Capital Gains Tax
• you were a company director – unless it was for a non-profit organisation (such as a charity)
• a non-profit organisation director who received pay or benefits, for example, a company car
• you or your partner earned over £50,000, and either of you claimed Child Benefit
• you had income from abroad that you need to pay tax on
• you lived abroad and had a UK income
• your taxable income was over £100,000
• you were a trustee of a trust or registered pension scheme
• you had a P800 from HMRC saying you didn’t pay enough tax last year, and you didn’t pay what you owed through your tax code or with a voluntary payment
• your State Pension was more than your Personal Allowance and was your only source of income – unless you started getting your pension on or after 6 April 2016
• If the HMRC have written to you asking you to complete one
• Certain people within certain professions, for example, religious ministers or Lloyd’s underwriters, although you usually won’t need to send a return if your only income is from your wages or pension.

For more information, visit https://www.gov.uk/self-assessment-tax-returns/who-must-send-a-tax-return

When do I need to complete my tax return?

You need to complete a paper tax return by 31^st October for the previous tax year or online by 31^st January. For example, the deadline for online returns for the 2016/17 tax year is January 2018.

You must register for Self-Assessment if you’re self-employed or a sole trader, not self-employed, or registering a partner or partnership by 5^th October.

When is payment due?

The payment for the tax that you owe is due on 31^st January for the previous tax year. Therefore, if you leave your tax return to the last minute, unless you have been keeping money aside to pay the tax, you could be caught short if you leave filing your return to the deadline.

If you make payments on account – advance payments towards your bill, you may also have payments due on 31^st July.

You will have to make 2 payments on account every year if:

• your last Self-Assessment tax bill was more than £1,000
• you haven’t already paid more than 80% of all the tax you owe

The payments are due by midnight on 31 January and 31 July, and each payment is half your previous year’s tax bill. If when the tax return is calculated, you owe more money, the additional amount is due on 31^st January.

For example, in 2024/25 Bob filed his first tax return and had a tax liability of £5,000. He paid £7,500 on 31^st January 2025. This was made up of the £5,000 tax due for the 2024/25 tax year and the first payment on account of £2,500 for the 2025/26 tax year. The second payment on account of £2,500 was due on 31^st July 2025. When he completed his tax return for the 2025/26 tax year, his tax bill was £6,000. He therefore had to pay £1,000 balancing payment plus £3,000 payment on account for 2025/26 tax year on 31^st January 2026. With another £3,000 payable on 31^st July 2026.

What happens if I don’t file my tax return?

If your tax return is up to 3 months late, you will get a fine of £100. If it’s over 3 months late, the penalty will be higher than this.

What happens if I don’t pay the tax I owe?

Interest will be added to the tax owed if your payment is late.

Do I have to file my own tax return?

You do not have to file your own tax return, you could employ an accountant to do this for you. You may be able to do your return yourself. However, for more complex circumstances, you may wish to engage an accountant. They will also be able to suggest ways to mitigate tax.

Conclusion

It is important to complete a tax return if you are required to do so and to do it in a timely manner.

There is lots of useful information on the HMRC website.

For more complex cases, speak to an accountant.

* Tax years run 6^th April to 5^th April

The post Have you done your Tax Return? appeared first on Alice Douglass.

An ISA or Individual Savings Account is a tax-efficient savings/investment vehicle.

An ISA is just like any other form of investment with certain tax advantages. All investments whether it be an ISA, a pension, a LISA, a bond, or a general investment account all work in much the same way apart from their tax status. This is why they are often called “tax wrappers”.

Whatever tax wrapper you put your money into, it will be “invested” in much the same places whether it be cash, government or company loans, commercial property, or company shares. Your money will be “pooled” with other investors’ into funds that hold a mixture of these “assets” based on your attitude to risk, term of investment, and a number of other factors.

In essence, you could hold the same funds within your ISA as in your pension.

 What does the ISA tax wrapper mean for your investment?

1.  Your investments grow free from tax

Within an ISA there is no tax on income or interest. What does this mean?

Any growth within an ISA is not taxed*

2. There is no Capital Gains Tax on ISAs

This means that when you sell funds within your ISA, any gains made from the proceeds of the sale will not be taxed

3. Any income or withdrawals taken from an ISA are tax-free

This means that when you take money out of your ISA, there is no tax to pay

4. ISAs do not need to be included on your tax return

ISA restrictions

Due to the tax advantages of an ISA, there is a restriction on the amount that can be paid in each tax year – currently £20,000 (2025/26). This can be held in cash or Stocks and Shares, or a mixture of both.

It should be noted that ISAs do form part of the deceased’s Estate for Inheritance Tax purposes which means that money held within an ISA could be subject to Inheritance Tax. This is unless the ISA is invested in AIM shares that have been held for 2 years and are held at the date of death.

Age limits and Junior ISAs

ISAs can be held for any period of time – there are no restrictions on when you can access your money (unless you invest in a fixed-term deposit within an ISA). Any UK resident aged 18 or over (16 for Cash ISAs) can invest in an ISA and there is no upper age limit.

There are also junior ISAs for those under 18 years. This could be a Cash Junior ISA or a Stocks and Shares Junior ISA. The maximum that can be invested into a Junior ISA is £9,000 (2022/23). However, a little-known fact is that 16-18-year-olds can open a Cash ISA and a junior ISA in the same year, meaning they’re able to save up to £29,000 a year tax-free.

Please note:

Tax rules, rates, and allowances are all subject to change and are dependent on individual circumstances. The Financial Conduct Authority does not regulate tax advice and some forms of offshore investments. The value of investments and the income from them can fall as well as rise and you may not get back the full amount you invested

* “Net” funds can be held within an ISA, if this is the case, income on dividends will still be taxed at 10% – this cannot be reclaimed. Most providers have gross funds in which the income is not taxed.

The post What is an ISA (including a little known fact)? appeared first on Alice Douglass.