Fill Up Your Allowances

Fill up your allowances

UK tax rules are always under scrutiny, and there are never any guarantees that the tax allowances we are used to as investors will be around forever. 

Capital Gains Tax (CGT)

Last year, Chancellor Jeremy Hunt reduced the CGT tax-free allowance from £12,300 to £6,000 for the 2023/24 tax year, and £3,000 in the 2024/25 tax year. If you are sitting on assets that are subject to gains, you may want to take advantage of the £6,000 allowance before the end of the tax year.

Fill Up Your ISAs

The ISA allowance for 2024/25 tax year stays at £20,000 and at £9,000 for Junior ISAs. ISAs provide a simple, tax-free wrapper for investments. Once the money is inside, they are free from Capital Gains Tax and Income Tax forever.

Even if built up slowly, the long-term benefits of ISAs add up; especially for generating a tax-free income in retirement.

Don’t Forget Your Pension

Pensions flexibility rules have made a big difference, and the tax relief on pension contributions can boost investments.

For a basic rate taxpayer, investing £1,000 into an ISA requires £1,200 salary before income tax (plus national insurance). To put £1,000 into a pension costs just £800 as £200 tax relief is added.

For a higher rate taxpayer, the net contribution is effectively £600 as £200 is given as relief through your tax return.

If your adjusted earnings are going to exceed £100,000 this tax year, then you will also start to lose your Income Tax Personal Allowance of £12,570.

Any Questions?If you want help or advice on the best options for you, speak to the team here at Raymond James Hitchin. Remember, tax treatment depends on individual circumstances and may be subject to change in the future.


Speak to one of our 

expert wealth managers

Speak to one of our

expert wealth managers

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