Using your allowances to lay the foundations for your financial future

No matter what your personal circumstances are, this cost-of-living crisis is beginning to bite.  Although some of us may have more of a buffer against rising inflation, energy bills and interest-rates, the longer-term impact on our financial wellbeing is making for sleepless nights. 

Using up your UK personal allowances helps to make the most of your investments, meet your outgoings, and lays the right foundations for your financial future. 

These are the ‘big three’ personal allowances not to miss out on:

The £9,000 JISA allowance

•    This year, the Junior ISA (JISA) tax-free allowance is still £9,000, so it makes sense to use this tax-free opportunity to save for your children or grandchildren.  It’s a lovely way to get them off to a great start later down the line – and you reap the tax benefit now. 

Your £3,000 gifting allowance 

•    We all want to pass as much of our money and assets on to our loved ones rather than HMRC. Using your annual UK tax-free gifting allowance of £3,000 means that you’re reducing the overall value of your estate when it comes to the final tally of Inheritance Tax or IHT. 

•    Even if you give away more than that, the amount will become IHT exempt if you survive for seven years. 

•    Plus, it’s back datable. You can carry the allowance over for one tax year, meaning you could give away up to £6,000.

Your Capital Gains Tax allowance 

•    If you’re planning to sell any UK properties that you own, the changes to Capital Gains Tax or CGT this year are particularly relevant to you. 

•    This is the last year that you’ll be able to claim the full £12,300 CGT allowance, which is the amount you can make before you start paying tax.  It’ll drop to £6,000 in 2023/24, and then to £3,000 from April 2024. 

•    If you’re going to sell any UK property , you’ll probably want to talk through your plans with us.  

Make the most of your tax allowances before tax-ear end

Making the most of every tax-saving allowance or tax relief allowance that’s on offer lays some solid foundations for your financial future. 

With so many other aspects of our lives changing on an almost daily basis, it’s good to know that you can do something practical to help your short and long term financial wellbeing. 

This article is a general communication being provided for informational purpose only. It should not be relied upon as financial advice and it does not constitute a recommendation, an offer or solicitation. No responsibility can be accepted for any loss arising from action taken or refrained from based on this publication. All information presented herein is considered to be accurate at the time of production, but no warranty of accuracy is given and no liability in respect of any error or omission is accepted.

The value of an investment with St. James’s Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than the amount invested. 
The levels and bases of taxation and reliefs from taxation can change at any time. The value of any tax relief depends on individual circumstances. You are advised to seek independent tax advice from suitably qualified professionals before making any decision as to the tax implications of any investment. 

SJP Approved: 07/12/2022