Tax year-end 2022 / 23 : lay the foundations for your financial future
With reductions in tax reliefs and allowances looming for 2023 / 24 , now ’ s a good time to ensure you ’ re taking maximum advantage of them in this tax year .
It ’ s always a good idea to take advantage of your annual tax reliefs and allowances wherever you can .
This year , though , it ’ s more important than ever . In his first Autumn Statement , Chancellor Jeremy Hunt announced reductions to a number of key allowances used by investors , as part of his attempts to shore up the nation ’ s finances .
Which key allowances are changing ?
Capital Gains Tax The Capital Gains Tax ( CGT ) allowance for the current tax year ( 2022 / 23 ) is £ 12,300 . This means that when you sell investments , you can enjoy gains up to £ 12,300 before you pay CGT .
But following the Chancellor ’ s announcement in the Autumn Statement , from 6 April 2023 , the CGT allowance will be more than halved to £ 6,000 , before it halves again in 2024 / 25 to just £ 3,000 a year .
Dividend allowance The Chancellor also set his sights on the dividend allowance . This is the amount you can earn from company shares , including dividends from money held in collective investments such as funds and investment trusts before Dividend Tax is charged .
Currently , the dividend allowance is £ 2,000 , but from 2023 it will be halved to £ 1,000 and then halved again to £ 500 in 2024 / 25 .
Which allowances could I be utilising ? You can shelter your investments from Dividend Tax and CGT by holding them in tax-efficient wrappers , such as a pension or Stocks & Shares ISA .
If you ’ ve already fully funded your ISA or pension , you could consider a pension for a spouse , child or grandchild , or explore ISAs for your family . A Junior ISA can be a tax-effective way of saving a lump sum for the children in your life . Junior ISAs have a lower allowance of £ 9,000 a year ( 2022 / 23 ).
The value of advice We can help you take advantage of the reliefs and allowances you ’ re entitled to .
In addition to making more of your wealth , this can also have a priceless impact on your financial wellbeing , sparing you the worry around paying too much tax or breaching rules and not paying enough .
Get in touch before 5th April 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 .
An investment in Stocks and Shares ISA will not provide the same security of capital associated with a Cash ISA or a deposit with a bank or building society .
The levels and bases of taxation , and reliefs from taxation , can change at any time and are generally dependent on individual circumstances .
Each year , you can pay up to £ 20,000 into an ISA or if you can tie the funds up until age 55 ( 57 from 2028 ), you can save into a pension .
J o n a t h a n K n e e
D i p P F S R egistered Member o f the Personal Finance Society S e n i o r F i n a n c i a l C o n s u l t a n t
01225 30028 1 07 8 1 1 1 6 9 2 8 6 j o n a t h a n . k n e e @ s j p p . c o . u k ww w . m c k e n z i e a n d c o . c o . u k
Senior Partner Practice
Mc k e n z i e & C o F i n a n c i a l C o n s u l t a n t s i s an Appointed Representative o f and represents o n l y S t . J a m e s ’ s P l a c e Wealth Management p l c ( which is authorised and regulated b y the Financial C o n d u c t A u t h o r i t y ) f o r the purpose of advising solely on the group ’ s wealth management p r o d u c t s and services , more details o f which are set o u t on the group ’ s we b s i t e w w w . s j p . c o . u k / p r o d u c t s . T h e ‘ S t . J a m e s ’ s P l a c e P a r t n e r s h i p ’ a n d t h e t i t l e s ‘ P a r t n e r ’ a n d ‘ P a r t n e r P r a c t i c e ’ a r e m a r k e t i n g t e r m s u s e d t o d e s c r i b e S t . J a m e s ’ s P l a c e r e p r e s e n t a t i v e s . Mc kenzie & Co Financial C o n s u l t a n t s i s a t r a d i n g n a m e o f Mc Kenzie Wealth Management L t d .
S J P A p p r o v a l 0 7 / 0 2 / 2 0 2 3 SJP13838 _ DS B1 ( 01 / 23 )