Sam Johnston, Financial Consultant from Penney Financial Partners shares the benefits of forward planning and the opportunities that could be available to you, from utilising unused pension allowance to reducing inheritance tax.

You don’t have to wait for the tax year end

You might be forgiven for thinking that tax planning is something that only needs to be considered as the end of the tax year approaches.

It is undoubtedly the busiest time of the year as financial advisers work hard to help ensure that their clients have used up their available allowances and tax reliefs before the April 5^th deadline.

However, while there are certainly significant benefits in talking to us in the run up to the end of the tax year, the reality is that all year-round tax planning can potentially make a far bigger difference to your life.

Ensuring that you are as tax efficient as possible means considering the potential opportunities and actions that could be taken around a wide range of different life events.

For example, if you’re self-employed and have enjoyed a better than average year, you may be able to take advantage of carry forward rules and pay more than the annual allowance of £60,000 into your pension, which allows you to use an unused allowance from the previous three years.

With the increasing challenges currently facing young people in terms of funding their education or climbing onto the housing ladder, you may also feel that now is a good time to share your wealth with children and grandchildren.

Each year you are able to give away £3,000 in tax free gifts – this is per individual – so couples can effectively double these – which will not only help those receiving the gift but in turn will help you reduce any potential Inheritance Tax bill further down the line.

Maybe you’ve recently had a new child or grandchild in the family and want to consider setting them up with a child’s pension – each year you can invest £2,800 in a pension per child, which will be topped up to £3,600 be pension tax relief.

With the power of compounding, establishing a pension early in a child’s life can be transformational further down the line and can be particularly important for girls who will traditionally retire on less than the men in their lives.

These are just a few examples of ways to plan your tax effectively throughout the year – and through your life – and help to ensure that you are not handing over more of your wealth to the taxman than you really need.

Here at Integro Accounting, Penney Financial Partners are our recommended partner for financial planning. Here’s more information on why you should choose Penney Financial Partners and how they can help you.