How to beat the grab with our handy tips ...
YOU can ease some of the burden of Jeremy Hunt’s tax grab through these simple planning measures:
USE ISA ALLOWANCE
Returns on cash or stocks and shares are free both of income tax and capital gains tax, for life. You can put away up to £20,000 each year, and so can your partner. Children have a £9,000 junior Isa allowance.
CONSIDER PREMIUM BONDS
More than 22 million people hold Premium Bonds and all their winnings are free of tax. But they are not suitable for those who need a reliable income.
SHARE CAPITAL GAINS
If you have any capital gains consider taking them before April, before the £12,300 annual exemption is cut to £6,000, then £3,000 in April 2024. Married couples and civil partners can reduce liability by pooling annual exemptions through an “interspousal transfer”. Consider also moving assets into the name of the partner who pays less income tax. Also, offset any losses against gains. If you move into a lower income tax bracket, say, after retirement, consider delaying taking gains.
PAY MORE INTO YOUR PENSION
Savers can still claim tax relief on contributions, watch their money grow free of tax and pass on unused pot free of inheritance tax. You can claim tax relief on up to £40,000 a year, plus any unused tax relief from up to three previous tax years.
CONSIDER SALARY SACRIFICE
Check whether your employer offers a salary sacrifice arrangement, where you take salary or bonus as a pension contribution. This saves on income tax and National Insurance contributions. Some schemes also let you pay for a company car, bicycle, season ticket loan or childcare out of gross pay.
CLAIM MARRIAGE ALLOWANCE
If one spouse earns less than the £12,570 personal allowance and the other is a basic-rate taxpayer, the couple can get this tax break worth £252 a year. Claims can be backdated up to four years, saving £1,242.
TAX-FREE CHILDCARE
More than 800,000 families fail to claim tax-free care worth up to £2,000 a child towards childminders, play schemes, nurseries, nanny.
INHERITANCE TAX
Thresholds frozen until 2028 so do use gift allowances. Every year you can gift up to £3,000 tax free, plus last year’s allowance if you didn’t use it. You can also give up to £250 each year to who you wish, plus gifts when loved ones marry.