MAKE YOUR TAX YEAR-END A SUCCESS

There’s no better time than the start of the year to get into good fi nancial habits that will make a real difference to your life – including making the most of the available tax allowances, reliefs and exemptions in the current 2022/23 tax year.

Effective tax planning may help you reach your future dreams faster. Ask yourself: Is your pension planning on track? How much tax will you pay on your investments? How much of your wealth could pass on to your family, free of Inheritance Tax? It’s all in your control.

And this year, tax planning is more important than ever, with Chancellor Jeremy Hunt announcing reductions to a number of key allowances after April 6th 2023.

HERE ARE FOUR THINGS TO THINK ABOUT:

1 MAKE USE OF YOUR ISA ALLOWANCE

ISAs are a great way of making your money work harder for you. Each year, you can pay up to £20,000 into an ISA. Everything you earn from it is free of Income Tax, Capital Gains Tax and Dividend Tax – so you won’t pay tax on interest, withdrawals or profits. Win, win!

2

Give The Next Generation A Head Start

Taking care of your own fi nances is just the start, as those of younger family members might need some attention too. A Junior ISA can be a tax-effective way of saving a lump sum for the children in your life. Junior ISAs have a lower allowance of £9,000 a year (2022/23).

3 Reduce The Taxable Value Of Your Estate

If your beneficiaries will likely pay Inheritance Tax (IHT) when you die, you may also want to think about using your gifting allowances. Each year, you can give away £3,000 (or £6,000 between couples) free of Inheritance Tax.

4 Be Aware Of The Capital Gains Tax Changes

The Capital Gains Tax (CGT) allowance for the current tax year (2022/23) is £12,300. But following the Chancellor’s announcement in the Autumn Statement, the CGT allowance will be more than halved to £6,000 from April 6th 2023 and will halve again in 2024/25. The current rates for CGT are 10% for basic-rate taxpayers and 20% if you pay the higher or additional rate (18% and 28% for residential property sales).

Seize The Day

Tax planning can help you strike a balance across the different areas of your life, giving you confidence that, over time, you can get where you want to be. Remember, it’s nearly always a case of ‘use it or lose it’.

Since tax rules are ever-changing and often complex, there is value in seeking advice. I can help you check there are no gaps in your plans and that you’re not missing out on tax allowances and reliefs that can really benefit you.

Let’s start 2023 on the front foot – contact me today to arrange a no-obligation chat.

Samantha Kaye

Chartered Adviser, Wellesley

E: samantha.kaye@sjpp.co.uk

www.wellesleywa.co.uk

The value of an ISA with St. James’s Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than you invested.

The levels and bases of taxation and reliefs from taxation can change at any time. The value of any tax relief depends on individual circumstances.

St. James’s Place guarantees the suitability of advice offered by Wellesley when recommending any of the services and products available from companies in the Group. More details of the Guarantee are set out on the Group’s website www.sjp.co.uk/products

Wellesley is a trading name of Wellesley Investment Management Ltd. The Partner Practice is an Appointed Representative of and represents only St. James’s Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority) for the purpose of advising solely on the Group’s wealth management products and services, more details of which are set out on the Group’s website www.sjp.co.uk/about-st-james-place/our-business/ our-products-andservices. The ‘St. James’s Place partnership’ and the titles ‘Partner’ and ‘Partner Practice’ are marketing terms used to describe St. James’s Place representatives. Wellesley Investment Management Ltd: Registered Office: 44 The Pantiles, Tunbridge Wells, Kent, England, TN2 5TN. Registered in England & Wales, Company No. 06530147.

BY MAARTEN HOFFMANN