The tax year-end is a crucial time for financial planning. As advisers, you play an essential role in ensuring your clients utilise available tax reliefs, allowances, and exemptions before the year-end deadline.
This concise guide is designed to support your planning, showcasing key reports and tools available for our existing Söderberg & Partners Wealth Management clients.
In the coming weeks, we will also share important key dates and deadlines to ensure a smooth end to the tax year.
Income Tax Planning
Personal Allowance:
- The personal allowance for income tax in 2024/2025 remains at £12,570 (subject to income).
- Ensure clients are not exceeding the threshold where their personal allowance begins to taper off (income over £100,000 reduces by £1 for every £2 over the limit).
Maximising Pension Contributions
Annual Allowance:
- The annual allowance for pension contributions is £60,000 (subject to tapering for high earners).
- Contributions above this limit may be subject to tax charges.
Tip: Use our portfolio transaction report to track your client's current tax-year pension contributions.
Lifetime Allowance:
- The Lifetime Allowance (LTA) for pensions has been abolished for the 2024/2025 tax year.
- Although there is no upper limit on the value of a pension, note that the new Lump Sum Allowance and Lump Sum Death Benefit Allowance could limit the amount of tax-free benefits clients can take in retirement.
Note: The following article provides details of the changes and thresholds.
Capital Gains Tax (CGT) & Investment Planning
Annual Exemption:
- For the 2024/2025 tax year, the annual exemption for CGT is reduced to £3,000 (from £6,000 in the previous year).
Tip: Use our CGT calculator to track realised and unrealised gains for all GIA accounts.
Capital Gains Tool – Söderberg & Partners Wealth Management
Individual Savings Accounts (ISAs)
Remember our fully digital ISAs are quick and easy to open, our unique instant deposit functionality means your clients account can be opened and funded all within an hour, maximising your clients’ growth potential.
We also facilitate multi-investment strategies to allow diversification of your clients’ portfolios. This is inclusive of the ISA which some other platforms are unable to offer.
Contribution Limits:
- The ISA contribution limit for the 2024/2025 tax year is £20,000.
Note: We support the replacement of adviser fees as part of our flexible ISA functionality, maximising your clients’ ISA tax advantages.
- The Junior ISA (JISA) contribution limit for 2024/2025 tax year is £9,000.
Note: Graduated JISA accounts are updated to reflect the full ISA allowance.
Reports Available:
- The ISA and JISA subscriptions report can help identify clients with remaining contribution allowances. This is available via Dashboard 7 – Line by line - Report menu.
Inheritance Tax (IHT) Planning
Annual Exemptions and Allowances:
- The annual exemption for gifts is £3,000, with the option to carry forward any unused exemptions from the previous year.
- Gifts between spouses or civil partners are exempt from IHT.
Dividend Taxation & Planning
Dividend Allowance:
- The dividend allowance for 2024/2025 is £500 (tax-free).-
- Beyond this, dividend income is taxed as follows:
8.75% for basic-rate taxpayers
33.75% for higher-rate taxpayers
39.35% for additional-rate taxpayers