End of tax year planning

06 March 2019

As we approach the end of another tax year, Julia Peake from Sanlam discusses what you need to look out for to ensure clients remain on track.
If you’re in the throes of end-of-year tax planning for your clients, it pays to remind yourself of some of the following tax tips:

Income tax

  • Gifting income producing assets to a lower-paying spouse/registered civil partner, could increase the joint income. 

  • If your client has lost some or all of their personal allowance (when income is over £100,000) or child benefit (when income is over £50,000), they can regain some of it by contributing to a pension (depending on salary and any carry forward) or applying gift aid to extend the basic rate band. This is also key if their salary pushes them into the higher rate tax band. 

  • If your client is a non-tax payer, or they can assign to one, they can use the starting rate for savings income (0% for the first £5,000), and the personal savings allowance (£1,000 for basic rate, £500 for higher rate taxpayers) to take gains from offshore bonds. Calculations will need to be completed to see what is suitable for each individual client. 

  • Take natural income from ISAs, as it is tax free. ISAs should be used in a client’s financial plan because of their tax efficiency and are normally a client’s first port of call and they can be so straightforward.

Capital gains tax (CGT)

  • Passing assets between spouses and registered civil partners is exempt from CGT, meaning both CGT exemptions could be used (if available) and more could be withdrawn tax free. Additionally, depending on the rates of income tax, this could potentially push up the joint income if one is a lower rate tax payer. 

  • Clients with losses on their investments must register these with HMRC within four years so they can be carried forward indefinitely. 

  • Certain clients may also be able to take advantage of entrepreneurs’ relief, subject to certain conditions being met and before rule changes come into effect in tax year 20/21. Professional tax advice should be sought for clarification on this matter.

Inheritance Tax

  • The annual exempt gift(s) of £3,000 should be made before the end of the tax year. This could be as much as £12,000 for a couple who have not used last year’s allowance. Other exempt gifts could also help reduce IHT liability and these should be explored with clients. 

  • Utilising trusts with life assurance and whole of life policies is a simple way to help reduce IHT, as is gifting investment bonds to trusts. It’s important to choose the right trust for your client, and discussion around access to capital and income will be vital as most trusts are irrevocable.

Making pension contributions

  • Pensions are free from income, capital gains and in most cases inheritance tax, making them one of the most tax-efficient vehicles available. 

  • The annual allowance of £40,000, (plus any carry forward), along with the lifetime allowance (£1.03m tax year 18/19) should be a consideration when looking at pension funding. Though salary and the tapered annual allowance may restrict how much clients can contribute. 

  • Tax relief (or deducted at source if in an auto enrolment scheme) is a key benefit for pension schemes. If clients are higher or additional rate taxpayers, additional tax relief on their contributions can be sought via their self- assessment. Some of this tax relief will differ for Scottish taxpayers and moving in to tax year 19/20, Welsh taxpayers also.


While there are many planning opportunities with different clients, ensuring the basics are done well is key to a successful financial planning strategy.

At Sanlam we have a range of different investment products and services which can help your clients achieve their financial goals. For more information, speak to your regional development manager.

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