As the end of the tax year approaches, many individuals find themselves asking — “How can I make the most of my tax allowances to secure my financial future?”
While tax planning may seem like something to save for later, the reality is that strategic actions now can significantly impact both your present financial position and your long-term legacy.
At Moneytree Wealth Management, we believe that proactive planning is key to building wealth and ensuring a lasting legacy for future generations. As you prepare for the new tax year, here are some of the most effective ways to maximise your tax allowances before the year-end.
1. Maximise Pension Contributions
Pensions are one of the most tax-efficient ways to save for your future. Contributions to a pension scheme are typically tax-deductible, meaning you can reduce your taxable income by increasing your contributions before the tax year ends. By making the most of your annual allowance, you could benefit from significant tax savings while securing your retirement.
Important Pension Investment Warning: The value of pensions and investments and the income they produce can fall as well as rise. You may get back less than you invested.
2. Use Your ISA Allowances
Individual Savings Accounts (ISAs) offer another great way to reduce your tax burden. The beauty of an ISA is that any returns on your investment are tax-free. The annual allowance for ISAs is generous, so consider topping up your ISA to the limit. Whether it’s a Cash ISA, Stocks & Shares ISA or Lifetime ISA, this tax-free growth is an excellent way to build your wealth.
3. Gift to Loved Ones
The end of the tax year is a prime time to consider gifting to loved ones, particularly if you’re looking to reduce your estate for inheritance tax purposes. Take advantage of your annual gift allowance and make gifts to your children or grandchildren to build wealth for future generations while lowering your potential tax liability. Remember that gifts made to individuals up to a certain limit are not subject to inheritance tax, so planning ahead can significantly reduce the tax burden on your estate.
4. Review Capital Gains Tax Allowance
If you’ve sold any investments or assets, don’t forget to use your capital gains tax (CGT) allowance before the tax year ends. The CGT annual exemption allows you to make a certain amount of tax-free gains. If you’ve reached this allowance or are close to it, consider selling investments strategically to take advantage of this exemption or offset gains with any allowable losses.
5. Consider Charitable Donations
Charitable giving is another way to reduce your taxable income. Donations to registered charities are tax-deductible, which means you can lower your income tax liability while supporting causes that matter to you. If you’re planning a year-end donation, consider contributing through Gift Aid to charities and community amateur sports club (CASCs) for an added tax benefit.
6. Plan for Inheritance Tax
Inheritance tax (IHT) can significantly impact the wealth you pass on to your loved ones. However, with careful planning, you can mitigate IHT liabilities. Consider making use of the available exemptions, such as the annual gift exemption or contributing to trust funds for your children. Working with a financial planner can help you structure your wealth to ensure it is passed on to the next generation without unnecessary tax burdens.
Important: Inheritance Tax is not regulated by the Financial Conduct Authority.
Maximising your tax allowances at the end of the tax year is not just about minimising your tax liability — it’s about building a financial foundation that will support future generations. By taking a few strategic actions now, you can ensure that your wealth is positioned to grow and benefit those who matter most.
At Moneytree Wealth Management, we believe that planning for the future is key to building a lasting legacy. As the tax year comes to a close, take the time to review your allowances and make informed decisions that will set you and your family up for long-term success. Contact us today at 01244 470 107 or info@moneytreewm.co.uk to learn more about how we can help you plan for your financial future.
Approver Quilter Financial Services Ltd & Quilter Mortgage Planning Ltd 20/03/2025
