Chancellor Rachel Reeves will deliver Labour’s first Budget on Wednesday 30 October & has promised some sweeping changes to try and decrease the government spending deficit. What any changes will actually mean for everybody is yet to be fully understood and, unless there are significant leaks from the Chancellor in advance, we won’t know the detail until the day. But it pays to keep abreast of speculation.
Now is a great time to review your finances & consider preliminary actions that may help reduce your tax bill over the long-term. Here’s a checklist to help individuals prepare ahead of the announcements and ensure their financial affairs are in the best possible shape.
1. Maximise ISA Contributions.
- Why: ISAs (Individual Savings Accounts) offer tax-free growth on savings and investments.
- Tip: Consider maximising your ISA allowance (£20,000 for the 2024/25 tax year).
2. Use Your Pension Allowances.
- Why: Contributing to a pension offers tax relief.
- Tip: Make the most of your annual pension allowance, based on earnings, currently this could be as much as £60,000 for the 24/25 tax year. You may also have ‘carry forward’ allowances available in other words you may the ability to use un used allowances from three previous tax years.
3. Make Use of Gift Allowances (if you planned on doing so).
- Why: Gifts can be an effective way to reduce potential inheritance tax (IHT) liability.
- Tip: Use the annual IHT gift allowance of £3,000 per year, and consider making other exempt gifts, like those for weddings or regular gifts out of surplus income.
4. Review Your Income Sources.
- Why: Ensuring your income is tax-efficient can reduce the overall amount of tax you pay.
- Tip: Consider how different types of income (e.g., dividends, interest, salary) are taxed. Explore options like salary sacrifice for pensions or electric cars, which can reduce taxable income.
5. Consider Booking a Commitment Free Meeting.
- What: The Budget may introduce new tax rules, rates, or thresholds. We’re offering individuals to book a commitment free initial review with a financial advisor to discuss the changes that occur in October & how they may impact your unique situation along with possible strategies to minimise tax.
- How: Send us an enquiry using the link below to schedule a call in November now.
The value of an investment 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 the amount invested.
The levels and bases of taxation and reliefs from taxation can change at any time. Tax relief is dependent on individual circumstances.
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Get in contact now to book your commitment free, initial consultation.
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