Punch magazine once held a competition to find the eighth deadly sin. Among popular nominations were gardening and golf - but we have no doubt that the No. 8 spot really belongs to not using your tax allowances! So here's an eight-point summary to help you stay on the financial straight and narrow:
1. Open an ISA: If you pay tax and have money to invest, then consider investing in an ISA. You pay no further income tax and no capital gains tax. You must act by 5th April or this year's allowance will be lost forever. Find out more about ISA's here You can apply online, by telephone or by post.
2. Use your pension (SIPP) allowance: Changes to income tax rates mean that after 5th April pension contributions will be grossed up by 2% less - a good reason to make use of this year's allowance. It also marks the last chance for higher rate taxpayers to reduce their tax bill for the current year. Find out more about SIPPs here. You can apply online, by telephone or by post.
3. Make use of your capital gains tax (CGT) allowance : In this tax year you can sell investments with a gain of up to £9,200 without paying a penny of tax. If you do not use your allowance by 5th April it simply expires.
4. A clever way to use your CGT allowance: If you are holding shares showing a gain you could sell them (utilising your CGT allowance) and use the proceeds to fund your ISA or SIPP with our FREE Share Exchange Offer. Call our helpdesk on 0117 900 9000 to find out more.
5. Capital gains tax is changing: Currently you pay tax of up to 40% on your gains but from 6th April the rate changes to a flat 18%. However indexation and taper relief are being abolished. Visit our CGT calculator to find out how this affects you.
6. Have you considered VCTs?: For adventurous investors VCTs offer the chance to invest in some of the smallest, fastest growing companies in the UK . In return for the extra risk receive a generous tax rebate of up to 30%. Hargreaves Lansdown is the biggest broker of VCTs in the country. You can find out more information and view details of our special offers here.
7. Could you reduce your inheritance tax liability? You can give away £3,000 from your capital each tax year without any inheritance tax implications. You can also give away smaller gifts of up to £250 per person.
8. Or is it time for a full financial review? We have a team of dedicated financial practitioners located around the country who can assist you with all aspects of financial planning. Find out more here.
Finally, in case you're still trying to remember the full list, the first seven deadly sins are: Lust, Gluttony, Greed, Sloth, Wrath, Envy and Pride.
