Published On: Thu, Jan 2nd, 2020

Inheritance Tax to pension savings and ISA: What to check before April 2020 | Personal Finance | Finance


“While you should ideally keep track of contributions throughout the year, taking stock of your pension allowances in January might highlight an opportunity to make an additional payment, or payments, before the new financial year kicks in.

“For those close to reaching the upper limits, it’s worth bearing in mind that unused annual allowances from the past three years can also be ‘carried forward’. For example, in the current 2019/20 tax year, you could carry forward unused contributions from 2016/17, 2017/18, and 2018/19, but the clock re-starts on 6th April.”

Inheritance Tax: Making a post-Christmas gift

Some people may opt to reduce their Inheritance Tax bill, where is legally possible.

It may be that this can be done by giving away parts of the estate to loved ones.

The financial planner explained: “Gifting cash is another area that is subject to an annual limit, which runs from the start of the tax year, and could be worth adding to your year-end to do list.

“Tax exemptions realised through gifting can form a key part of inheritance tax (IHT) planning –which is also best tackled earlier rather than later.

“The annual allowance means individuals can gift up to £3,000 each year, exempt from inheritance tax, and can give as many gifts of up to £250 to as many people as they like.

“That is, unless the person has already received a gift equating to the annual £3,000 exemption. Some types of gifts, such as wedding gifts or gifts to help with living costs, can also be given tax-free.



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