2018-2019 Tax Year Ending: Time to make the most of your Tax Allowance?April 2, 2019 11:26 am
Incredibly it is April already and the beginning of a new Tax Year. But have you made the most of your Capital Gains Tax allowance? Do you know what you can use and whether you should?
For some of you, tax thresholds are a chore. The thought of filling out a self-assessment is a headache. I am completely with you. It can be a minefield. For those of you that aren’t sure what Capital Gains Tax is or how to work it out, visit our in depth article – Capital Gains Tax and Gold Bullion: What you need to Know.
Here are our top three things to think about.
Please note we aren’t tax advisers, so this article should be used as a guide only.
1) Know Your Current Limits
If you want to make the most of your tax relief, you have to know the thresholds. Otherwise, you could end up doing the opposite of what you intend!
Current Tax Year Allowances until 5th April 2019
From the the 6th April, the new tax year will begin. This means you have until Friday this week to fulfil your Capital Gains Tax allowance. At present the current Capital Gains Tax allowance is £11,700. This means you have £11,700 of tax free gain you can make in the 2018-2019 year.
To work out your Capital Gains Tax, visit our in depth article Capital Gains Tax and Gold Bullion: What you need to Know.
You also have an ISA allowance of up to £20,000 – this can be made up of cash or a stocks and shares ISA. The MoneySavingExpert has an excellent article about ISAs that is worth a read – https://www.moneysavingexpert.com/savings/ISA-guide-savings-without-tax/
2) Know What is Changing
So that you don’t get caught out, you have to be aware of what is changing. Sometimes we focus on how much is the current relief, we forget to see what is about to happen.
New Allowances 2019-2020 Tax Year
For the 2019 – 2020 tax year the tax thresholds are increasing. From the 6th April, the tax allowances will increase:
New Personal Income tax Allowance
New Basic Rate Threshold
New Higher Rate Threshold
New Capital Gains Tax Allowance
= £12,000 for individuals and £6,000 for Trusts
These tax thresholds deliver the Government’s objective one year earlier than intended. To view the Government’s publication on this, click here – https://www.gov.uk/government/publications/income-tax-personal-allowance-and-basic-rate-limit-from-2019-to-2020/income-tax-personal-allowance-and-basic-rate-limit-from-2019-20.
3) Plan Effectively
Once you know the thresholds, you can plan effectively. Everyone manages money differently, whether you have a goal in mind or just want to be tax efficient. The best thing you can do is to plan. Set a target of what you want to achieve. For some people that will be using the Capital Gains Tax relief to the full, or to offset some gains with a loss. For others it will be to make use of dividend changes or even to sell an asset either side of the tax year.
Whatever it might be, make your decision for a reason. At ATS we sell gold coins and silver that are Capital Gains Tax exempt. Gold coins like sovereigns and britannia one ounce coins are tax free. This means you can invest in a tax efficient way and save yourself a headache in the future.
For more information on Capital Gains Tax, we do have a full, in-depth article on Gold and Silver Bullion. Visit our full guide here – Capital Gains Tax and Gold Bullion: What you need to Know.