Skipton Financial Services
Tuesday, March 15, 2016 - 17:19

Tax Year Checklist

Want to postion your finances better? Here is a list of tax considerations that everyone needs to think about every tax year

1)    Have you made the most of your full ISA allowance?

Every UK adult receives an annual ISA allowance, which can be used to shelter a portion of your money, and the returns generated, from the taxman. However, annual ISA allowances cannot be transferred over into the following tax year – so if you don’t use it, you will lose it.

For the 2017/18 tax year, you can save or invest up to £20,000 through an ISA. If you have a partner and they use theirs too, as a couple you can invest up to £40,000 in a tax-efficient environment. 

The tax benefits of ISAs can really add up, if you use your allowance each year – so you should consider maximising your 2017/18 allowance, before the end of the year.

2)    Could you be paying more into your pension?

There are huge tax relief benefits available from saving for retirement through a pension. As a minimum, your contributions within the annual allowance will attract tax relief at your marginal rate If you are a higher or additional rate taxpayer, tax relief can be as high as 40% or 45% (providing you claim for it). 

You can pay in up to 100% of your net relevant earnings, up to a maximum of £40,000, for the 2017/18 tax year (although carry forward is available), into a pension – and benefit from tax relief. It’s worth considering if you could be paying more into your pension, to make the most of this valuable tax benefit. 

3)    Are you taking too much out of your pension?

From the age of 55, you can access your full defined contribution pension and use it however you wish, although normally only 25% of what you withdraw is tax-free. The rest is subject to income tax. 

If you take too much in one tax year, you might incur a higher tax charge. For 2017/18, if your taxable income exceeds £42,385, everything above it would be taxed at up to 45%.

So, if you plan to take more than this level, it might be worth staggering the withdrawals across two tax years, to reduce the amount of tax you would pay.

4)    Do your loved ones need to be concerned by inheritance tax?

If your estate is above a certain threshold, everything you own above it could be subject to a 40% inheritance tax bill. This would fall upon your loved ones to pay, and typically a bill would run into thousands of pounds.

There are ways you can reduce or eliminate any inheritance tax liability on your estate, for example by using your annual gift allowance. Everyone can give away £3,000 exempt from inheritance tax per tax year. If you didn’t use it at the time, you can still use your 2017/18 tax year’s exemption and gift £6,000 before April 5 2018. If you have a partner, you could both use this allowance and gift up £12,000. 


The tax treatment of your investments depends on your individual circumstances and prevailing legislation, both of which may change in the future.

Call us now on 0800 731 5342Request a Call Back

If you would like to receive information similar to this via email - please subscribe to our mailing list - click here.

Similar insights & resources

Why get financial advice?

When it comes to your money, seeking financial advice from an expert can have an equally positive impact on this hugely important area of your life. 

Coping with financial difficulties

It doesn’t matter how well off you are, almost all of us worry about money from time-to-time – and that anxiety can be exacerbated when it comes to coping with financial difficulties.

Financial scams – beware!

We feel it’s vital that you’re fully clued up on this subject, in case you’re ever targeted by a fraudster. So we’ve provided useful information on what to look out for, what to do if you’re ever approached and various types of scams.