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Basic end of year tax planning advice

As the end of the tax year approaches, it is time to think about using the tax reliefs that may be available to you if you take action before 5 April. The main areas for consideration are:

Pension Contributions
The limit on contributions into a pension fund in this tax year is £40,000 (down from £50,000 in the previous three years) and payment must be made on, or before 5 April 2015 for relief to be obtained against income for this year. If you have not made maximum contributions in the previous three years, you can increase the payment made now to utilise this relief.

Individual Savings Accounts (ISAs)
The maximum amount that can be paid into an ISA during this tax year is £15,000, and it is now possible for the whole of this amount to be paid into a cash ISA if you prefer not to investment in stocks and shares.

Capital Gains Tax
If you have investments on which you will realise capital gains if they are sold, consider selling them to crystallise gains up to the annual exempt amount, which for this current tax year is £11,000. If you have already made gains in excess of the exempt amount and have investments that are currently standing at a loss, consider selling them to crystallise the loss and reduce your tax bill.

Inheritance Tax
You may give away up to £3,000 per year completely free from inheritance tax. This can be in the form of a single gift to one person or several smaller gifts to a number of people. If you did not use the £3,000 exemption in the year ended 5 April 2014, you may make gifts of up to £6,000 before 5 April 2015.

There are also a number of other exemptions that are available, particularly if you are making gifts out of surplus income rather than capital, are you making gifts to someone because they are getting married, or are making lots of small gifts (less than £250 each)?

Also remember that any gifts to charity either during your lifetime or on death are completely exempt from inheritance tax.

For further information or advice, please speak to your usual contact at Moore or contact your local office.