Your Tax Year End checklist for 2025

With the 2024-2025 tax year end just around the corner. Are you sure you are ready?

From maximising your pension and ISA allowances—along with those of your family—to making tax-efficient investments for future expenses, your essential Tax Year End Checklist will help you stay focused on achieving your financial goals

Are you making the most of your tax allowances?

Many high earners may be missing out on valuable opportunities by not fully utilising the tax allowances and reliefs available to them each year.
If you’ve built up significant pensions and investments, maximising allowances and reliefs can help you grow and protect your wealth.
Time is of the essence – the 2024/25 tax year ends on 5 April. Take action now to ensure you’re making the most of every available tax benefit.

Key Tax Year End Areas to Review

Pensions

Maximise pension contributions – Contribute up to £60,000, subject to earnings limits and personal allowances.

Carry forward unused allowances – Use up to three years’ worth of previous allowances, potentially contributing up to £200,000 at a significantly reduced net cost.

Review total pension value – With the Lifetime Allowance abolished, consider whether additional pension growth suits your financial plan.

Leverage employer contributions – Maximise salary sacrifice and employer-matched contributions.
Utilise your spouse’s pension allowance – Consider contributing on their behalf if they have unused allowances.

Pension savings for children – Contribute up to £2,880 annually into a child’s pension, benefiting from government top-ups

ISAs

Use your ISA allowance – Contribute up to £20,000 for tax-free returns.

Utilise your spouse’s ISA allowance – Another £20,000 can be sheltered from tax.

Junior ISAs – Invest up to £9,000 per child for long-term, tax-efficient savings.

Consider a Lifetime ISA – Receive a 25% government bonus on contributions up to £4,000 if eligible.

Investments

Use your Capital Gains Tax (CGT) allowance – Realise gains up to £3,000 tax-free before 5 April.

‘Bed and ISA’ strategy – Sell and repurchase investments within an ISA to secure tax-free growth.

Offset capital losses – Reduce CGT liabilities by using previous losses.

Income

Transfer income to a lower-earning spouse – Shift income-generating assets to reduce your tax liability.

Maximise your dividend allowance – Use your £500 tax-free allowance before it resets.

Optimise rental income – Deduct allowable expenses and consider tax-efficient ownership structures.

Inheritance Tax (IHT)

Use your £3,000 annual gifting exemption – Carry forward unused allowance from the previous year.
Make small gifts – Unlimited gifts of up to £250 per recipient are exempt from IHT.

Give wedding gifts – Gift tax-free up to £5,000 to children, £2,500 to grandchildren, or £1,000 to others.

Utilise trusts – Protect assets from IHT through strategic trust planning.

Consider a life insurance plan – Write it into trust to help cover future IHT liabilities.

Charitable Giving

Maximise Gift Aid – Reduce taxable income while benefiting charities.

Donate shares – Receive full CGT and income tax relief on gifted shares.

Tax Reliefs & Allowances

Marriage Allowance Transfer – Shift up to 10% of your personal allowance to a lower-earning spouse.

Claim tax relief on professional fees – Deduct membership and subscription costs.

Use your Personal Savings Allowance (PSA) – Ensure interest earnings stay within tax-free thresholds.
Rent-a-Room Relief – Earn up to £7,500 tax-free by letting out a furnished room in your home.

Family & Education Planning

Tax-free childcare accounts – Get a government top-up of up to £2,000 per child.

School fee and university savings – Plan tax-efficiently for education costs.

Other Considerations for the tax year end

Boost your state pension – Check and fill National Insurance gaps to maximise entitlements.

Defer income if advantageous – Delay bonuses or dividends to manage tax exposure.

Review your tax code – Ensure it accurately reflects your situation to prevent overpayments.

Maximise company benefits – Use salary sacrifice schemes for pensions, electric vehicles, or cycle-to-work programs.

Review offshore investments – Ensure compliance and tax efficiency.

Optimise cash holdings – Check rates and use cash management strategies to maximise returns while maintaining FSCS protection.

Exploring Carry Forward in Detail

You may be eligible to ‘Carry Forward’ unused Pension Annual Allowances from the previous three tax years:
2021/22: £40,000
2022/23: £40,000
2023/24: £60,000
2024/25: £60,000
Potentially, you could contribute up to £200,000 if no prior contributions were made and you qualify. High earners with ‘threshold income’ over £200,000 and ‘adjusted income’ over £260,000 may be subject to tapered allowances, reducing to a minimum of £10,000 once adjusted income surpasses £360,000.

Understanding ‘Threshold Income’ and ‘Adjusted Income’ is key:
Threshold Income: Includes all taxable income (salary, bonuses, dividends, rental income) minus personal pension contributions.
Adjusted Income: Includes all taxable income plus employer pension contributions and most occupational scheme contributions.
Additional rate taxpayers can claim tax relief of up to 45%, potentially reducing the net cost of a £200,000 contribution to just £110,000.
Professional advice can help you determine your exact allowances and ensure full compliance with tax regulations.

Now you have read our tax year end checklist do you have questions. Why not contact a member of the team to discuss how our specialist advisors can help ensure you and your business are ready.

If you would like to book a call then please reach out to us today

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