Your Personal Tax Year End ‘To Do’ List

07 March 2017

image of calendar highlighting 5 April with a red pin

With the 2016 – 17 tax year end fast approaching, we thought it would be useful to provide a timely reminder of some housekeeping you should be considering if you have not already acted.


You have until 5th April to use your ISA allowance for the current tax year, this stands at £15,240 and is a case of use it or lose it. Any returns from an ISA are free from Income and Capital Gains Tax. It is now possible to use your ISA allowance to remove funds from your estate after 2 years and yet still retain full access and control over your funds.

Even if you have already used this year’s allowance, next year the ISA limit rises to £20,000 providing the chance to invest even more money tax efficiently.

Have you thought about investing for your children or grandchildren? It is now possible to invest up to £4,080 into a Junior ISA.


Pensions never seem to be out of the press these days. However, regardless of the coverage one thing that is beyond doubt is that pensions are still one of the most tax efficient investments available. Also, thanks to George Osborne you now have greater access and control over your pension funds.

One of the biggest changes to pensions is that on death, the fund value can pass down to any nominated beneficiary and will not form part of estate, thus avoiding Inheritance Tax.

You can save up to £40,000 per annum (subject to earnings: contributions are limited for those earnings over £150,000) and it is even possible to go back and use any unused limits from the three preceding tax years. Tax relief is given at your highest marginal rate meaning the more tax you pay the more relief you will receive. Also people with no income (children/grandchildren) can get up to 20% tax relief.

Please don’t forget you need to be aware of the appropriate Lifetime Allowance limit.

Venture Capital Trusts (VCT) and Enterprise Investment Schemes (EIS)

VCTs are becoming more and more mainstream and when you look at the tax benefits it is easy to understand why. With 30% of the investment amount as a credit to offset against your income tax bill and a maximum annual investment limit of £200,000 VCT investment can help reduce the largest of tax bills. With a minimum investment term of only 5 years and tax free dividends for the life of the investment, VCTs offer tax efficiency when you invest and then for life.

EIS offer the same income tax benefits as VCTs. Instead of tax free dividends, they have the advantage of qualifying for Inheritance Tax Relief after 2 years and providing the ability to defer capital gains liabilities. It must be said the price of achieving these tax benefits is a high degree of risk.

Both VCT’s and EIS are high risk investments and only suitable for those investors who understand the risks and are willing and able to accept the potential losses. They should generally only make up a small proportion of a large well diversified portfolio.

Capital Gains Tax

Everyone has a Capital Gains Tax (CGT) exemption. This year’s is £11,100 and, like the ISA limit, it is lost if not used. This allowance can be utilised within managed portfolios as part of profit taking exercise, even if you do not want to withdraw funds at this time; on-going capital gains management can significantly reduce any eventual tax liability. It is also possible to use profits from a managed portfolio to utilise your ISA allowance thereby improving the tax efficiency of your investments even further.


It may seem simple but one of the easiest ways of starting to mitigate an Inheritance Tax liability is to make regular gifts. Everyone has an annual exemption of £3,000 which can be given to anybody you wish, and don’t worry if you didn’t make use of last year’s exemption, that is still available too.

Wills and Power of Attorney

Whilst neither of these is directly related to the tax year they are still vitally important, a whole lifetime of planning can be undone by a poorly written will. With the introduction of Main Residence Nil Rate Band in April, re-visiting your will is even more important as previously sound use of trusts may mean your beneficiaries do not receive the full benefit of this new allowance.

Having your Powers of Attorney (PoA) in place will mean that there will be no period in which your affairs cannot be managed to preserve your interest. It is possible for your family to apply for a Deputyship Order if a PoA is lacking but this will take time, in the region of 4-6 months, and cost upwards of £2,000.

Your Financial Planner is here to help with any of these matters.