Your 2019-20 tax checklist

Your 2019/20 tax checklist

Gettyimages 697853664 WEB
Published: 22 Jan 2020 Updated: 13 Jun 2022

Have you used your annual allowance for pension contributions?

Pensions come with great tax benefits. For a start, investments in your pension are free from Income Tax and Capital Gains Tax. Pension contributions up to your annual allowance will also receive an automatic 20% top-up from the taxman, and higher-rate and additional-rate taxpayers can claim back another 20% or 25% through their Self Assessment.

Pension contributions up to your annual allowance will also receive an automatic top-up from the taxman.

Because of these generous tax rules, there is a limit to the amount you can pay into your pension. Each year you can contribute as much money as you earn, usually up to £40,000 (although this tapers down to £10,000 for higher earners). If you earn enough, you may also be able to make extra contributions by carrying forward any unused allowance from the last three tax years.

Please note that prevailing tax rates and reliefs depend on individual circumstances and are subject to change.

Have you made the most of your ISA allowance?

ISAs are also free from Income Tax and Capital Gains Tax. The ISA allowance is currently £20,000 – this doesn’t carry over between tax years, so any allowance you don’t use by 5 April will be lost forever. This is why it makes sense to use as much of your allowance as you can afford to each year.

Are you using other tax allowances for your savings?

The Government gives you several other allowances for savings held outside pensions and ISAs. You don’t need to do anything to start using these allowances, but if you exceed them you must inform HMRC and may need to complete a Self Assessment.

The Personal Savings Allowance is a tax-free allowance for interest payments. It is £1,000 for basic-rate taxpayers and £500 for higher-rate taxpayers but doesn’t apply to additional-rate taxpayers. All taxpayers also receive a £2,000 tax-free allowance for dividend income.

Are you and your spouse both making use of your personal allowances?

If you are married or in a civil partnership, you may be able to save money by structuring your finances as a couple to ensure you are using both spouse’s tax allowances. This could be an especially good idea if one spouse pays tax at a lower rate than the other.

You could save money by structuring your finances as a couple.

For example, one spouse could transfer income-generating investments to the other to use their Income Tax allowance, or transfer ownership of an asset before selling it to use their Capital Gains Tax exemption. In either situation you will need to contact your providers to arrange the transfer of assets, and there may also be paperwork to complete.

If you want to make financial gifts, have you used your annual tax-free allowances?

Each tax year you can make a range of tax-free financial gifts. These leave your estate immediately and won’t be taken into account when calculating your Inheritance Tax bill. They include:

  • Gifts to your husband, wife or civil partner (as long as the UK is their permanent home)
  • Gifts of up to £3,000 each tax year, which can be carried over one year for a total of £6,000
  • Unlimited individual gifts of up to £250 per person
  • Wedding gifts of up to £5,000 for a child, £2,500 for a grandchild or great-grandchild, or £1,000 to anybody else
  • Unlimited payments towards the living costs of a child, elderly dependant or ex-spouse
  • Regular gifts from surplus income that won’t affect your standard of living

Have you considered more complex tax-efficient investment schemes such as VCTs?

If you are a higher-rate or additional-rate taxpayer who can tolerate a high level of investment risk, you could also consider more complex tax-efficient investments such as Venture Capital Trusts (VCTs). These offer generous tax breaks to offset the added risks of investing in smaller, younger and unquoted companies*.

Our Bestinvest website has more information on VCTs.

Speak to a financial planner for help with tax

Our financial planners are experienced at helping clients make the most of tax rules and allowances, structuring their finances tax-efficiently to ensure they don’t pay more tax than is necessary.

Why not find out how we can help you by booking an initial consultation with a financial planner? There is no cost for this consultation – it is an opportunity for you to discuss your specific circumstances and goals with a financial planner. If you choose to take up any of our services, all costs will be agreed in advance.

Book a consultation


This article was previously published on Tilney prior to the launch of Evelyn Partners.