Tips for keeping your tax in check
3 practical ways to save and invest tax efficiently.
1. Use your full ISA allowance
ISAs offer a simple, tax-efficient way to grow your savings or investments. You can save or invest up to £20,000 this tax year across Cash ISAs or Stocks and Shares ISAs — with no UK tax due on any growth or income. Using your full allowance means your money keeps working harder for you.
Looking to pass on wealth or support your family? Junior ISAs could help your child get a head start, while keeping your own allowance intact.
2. Boost your pension
Your pension is one of the smartest ways to provide for your retirement, because it offers a number of tax advantages.
For example, for every £80 you pay in, HMRC will add £20 tax relief, bringing your total contribution to £100. If you’re a Higher or Additional-rate taxpayer, tax relief can be worth double that or more.
If you’re a member of your employer’s pension, they may match what you pay in and sometimes even more. Maximising employer contributions is a no-brainer.
3. Holding investments? Know your allowances
If you own investments outside an ISA or a pension, you could earn in different ways — such as dividend payments, interest or capital gains. But these are usually taxable.
The good news? You’ve got tax allowances to use first this tax year: £3,000 for capital gains and £500 for dividends. There's also a personal savings allowance for interest earned on savings and investments (£1,000 for Basic-rate taxpayers, and £500 for Higher-rate taxpayers).
Make sure you use them to the full to keep more of what you earn.
The value of investments, and the income from them, can fall as well as rise and you may get back less than you invest. Investments should generally be held for five years or more. Tax treatment depends on individual circumstances and may change in the future.
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