6 Things To Do To Protect Your Money From Tax

Matt | Personal Finance

6 Things To Do By April 5th To Protect Your Money From Tax #capitalgainstax #savings #investing   With the UK tax year ending on 5th April each year, take action and maximise your tax-free allowances before everything resets on April 6th! In this video, I’ll walk you through 6 key steps to pay less tax on your investments, savings, and pension contributions.   Related Phrases:   6 Things To Do By April 5th To Protect Your Money From Tax, How The Rich Avoid Paying Taxes, Proven Wealth-Building Strategies, How To Pay Less Tax, How To Reduce Capital Gains Tax, How To Reduce Tax On Investments, How To Reduce Tax On Pension Savings, How To Pay Less Tax On Savings And Dividends, How To Save Tax On Rental Income, How Much Tax Do I Have To Pay, How To Complete A Tax Self-Assessment, What Are The Savings Tax, Income Tax And Capital Gains Tax Thresholds, How To Pay Tax Online   #tax #savings #personalfinance #moneytips #stocks&sharesisa #taxplanning

Transcript

00:00the end of the personal tax year is fast approaching on the 5th of april 2025 which

00:05means you only have a handful of days left to take action to protect your money and maximize

00:10your tax allowances before everything resets for the next personal tax year in this video i cover

00:16six key things to do by the 5th of april so you don't lose out on your tax allowances and for

00:21some people this could help save you thousands of pounds if you're new to this channel i'm matt i've

00:26been a finance consultant for over 10 years and on this channel i talk all things personal finance

00:32so let's get straight into the video and start with the first topic which is isis currently every tax

00:37year each adult in the uk is able to put up to 20 000 pounds per year into isis and your money can

00:44then grow tax-free in those accounts there are different types of isa accounts that you can take

00:48advantage of which include a stocks and shares isa which is where you can invest in funds bonds

00:53and shares and any dividend income or capital gains that you get from disposing of shares which

00:59have increased in value is protected from tax in the isa account utilizing a cash isa is another

01:05option which is similar to a standard savings account you can get easy access cash isis which

01:10is where you can access your money whenever you want or you can get fixed rate cash isis which is

01:15where your money is locked away for a set period of time and it usually pays a higher interest rate on

01:21your savings the interest you earn on your savings can grow tax-free in a cash isa there is some

01:26speculation at the moment that the uk government could slash the amount that you can put each year

01:31into a cash isa to four thousand pounds so if with the current stock market volatility that we're

01:37seeing you're thinking about putting savings into a cash isa it could be worth thinking about how you

01:42can maximize your savings in this personal tax year another option is a lifetime isa these accounts

01:49are used for saving towards a first home or retirement you can only put up to four thousand

01:54pounds per year into these accounts so they're slightly different to the current cash isa and

01:59stocks and shares isa the benefit of this account is that the uk government adds a 25 bonus so if you

02:06can save four thousand pounds in a year you would get one thousand pounds free from the government i've

02:11got another video on my channel which covers the pros and cons of lifetime isis which i'll leave a link to

02:17down below you can pay into all the different types of isa accounts but the key thing is you can't

02:22exceed the twenty thousand pound per year threshold what is really important here is that your allowance

02:27resets every personal tax year so it's use it or lose it after the 5th of april you can't get back

02:34your allowance from a previous tax year as it doesn't roll over for most people i fully understand that

02:40twenty thousand pounds is a lot of money and i don't want to sound out of touch but even if you're

02:45nowhere near the threshold it's worth considering if you have any cash in a general savings account

02:51moving it to a cash isa or if you have any investments in a general investment account

02:55moving it to a stocks and shares isa so you can protect any future gains that you make against tax

03:01the next tax allowance to cover is on capital gains each personal tax year you get a three thousand

03:07pound capital gains tax free allowance for disposing of investments and assets for example crypto assets

03:13or stocks and shares outside an isa last year the capital gains tax rates were increased for the

03:19basic rate taxpayer it increased from ten percent to eighteen percent and for the higher rate and

03:24additional rate taxpayer increased from twenty percent to twenty four percent so you'd have to pay

03:29this tax for any gains above three thousand pounds if you're thinking about selling assets in the

03:34short term it's worth considering whether it makes sense to dispose of some of your assets prior to

03:39the fifth of april to use your three thousand pound capital gains tax allowance in this personal tax

03:45year and then disposing of additional assets after the sixth of april to use your three thousand pound

03:50tax allowance in the next personal tax year for example if you wanted to sell some cryptocurrency

03:55which had increased in value and the total gain was six thousand pounds if you sold and realized all

04:02of that game prior to the fifth of april you would have to pay five hundred and forty pounds if you're a

04:07basic tax rate payer and seven hundred and twenty pounds if you're a higher rate taxpayer whereas if

04:12you sold and realized the gain of three thousand pounds prior to the fifth of april and a further

04:17three thousand pounds after the sixth of april then no capital gains tax would be due as it would be

04:23within your tax allowances for each personal tax year another thing to consider is utilizing the spouse

04:29allowance if you live with a spouse or civil partner you can transfer assets to them on a no win no gain

04:35basis for example you could transfer crypto assets to them that give rise to a three thousand pound gain

04:42and when they receive the crypto assets tax-free they could sell it and use all of their capital

04:47gains tax-free allowance and you could do the same so that combined you have six thousand pounds of gains

04:53sheltered from tax each tax year the key thing is to make sure that you transfer the assets before you

04:59sell it and realize any gains the third tax allowance to consider is for dividend income and savings

05:05interest outside an iso each tax year you get a savings allowance meaning that you can earn up to

05:11one thousand pounds of interest tax-free if you're a basic rate taxpayer five hundred pounds of interest

05:16tax-free if you're a higher rate taxpayer and zero if you're in the additional rate tax band it may seem

05:22like a lot of interest to be earning but it can catch you out particularly as interest rates on savings

05:28have been a bit higher over the last couple of years if for example you had twenty thousand pounds in

05:33savings at a five percent interest then you would earn one thousand pounds and if you're a higher rate

05:38taxpayer then you'd be liable to pay tax on 500 pounds so that would be quite a bit of money lost to

05:44tax so again it's worth thinking about putting your money in iso's in this situation separate from this

05:50you also get a dividend income tax-free allowance of 500 pounds per year the tax on dividend income above

05:57this outside an iso or pension is 8.75 for basic tax rate pairs 33.75 for higher rate taxpayers and 39.35

06:09for the additional rate taxpayers so if you're earning over 500 pounds per year in dividend income

06:15consider moving these investments into an iso to protect any future income you get from tax the fourth

06:21tax allowance is for pension contributions the tax considerations for pensions can be complex but

06:27i'll cover some of the basic points to understand each tax year you're allowed to contribute into a

06:32pension up to 60 000 pounds or up to a hundred percent of your income whichever is the lower amount

06:39this threshold includes a basic rate of tax relief meaning that between you and your employer you can

06:44contribute up to 48 000 pounds with tax relief up to 12 000 pounds being added on top by hmrc now i know

06:52for most people it won't be possible to get anywhere near this amount and do note that for very high

06:58earners they get a lower annual allowance which you can see on the hmrc website another pension related

07:04tax allowance to consider is paying into your partner's pension if they're a non-earner for example

07:10if they're off work caring for children or elderly family members you can pay up to 2880 pounds per year

07:17into your partner's pension and then they receive 20 tax relief so 720 pounds topping up the total

07:24amount to 3600 pounds one thing to know if you're a higher rate taxpayer is that it may be more efficient

07:31to pay into your own pension because you get the higher rate tax relief the fifth tax allowance to

07:36consider is if you have children you can contribute up to 9 000 pounds per year into an iso for your child

07:43between the ages of 0 and 18 years old there are junior stocks and shares isis or junior cash isis

07:50and this contribution is separate from your own personal 20 000 pound per year isa tax allowance how

07:57it works is that parents open and manage an account and your child gets access to the account and is able

08:03to withdraw funds from when they turn 18 years old even contributing small amounts regularly can grow into

08:10significant savings over time as your investments benefit from the power of compound interest it can

08:16build into a brilliant financial safety net whether it's used for education towards a first home or even

08:22to pay for a future wedding another child related tax allowance is for junior sips each tax year you can

08:29pay up to three thousand six hundred pounds into a junior pension this includes any tax relief from the

08:35government so that means that you could pay up to two thousand eight hundred and eighty pounds per year

08:41and the government would add up to 720 pounds on top anyone can pay into a child's pension so for example

08:48a grandparent might decide that they want to save for their grandchild's future the sixth and final

08:53topic is national insurance you currently have the chance to plug gaps in your ni record going back to

08:592006 but after this tax year you'll only be able to go back by six years this could make a real difference

09:07to the amount that you receive from your state pension in retirement the full new state pension is

09:12221 pounds and 20 pence per week however how much you receive depends on how many qualifying full national

09:20insurance years you have 10 qualifying years are required to be eligible for the new state pension

09:25and typically 35 qualifying years are needed for the full amount for people between 10 and 35

09:32qualifying years they'll receive an apportioned amount based on their contribution history so making

09:38top-ups now to fill the gaps before the deadline could be the equivalent to thousands in extra income

09:44over your retirement if you want to do this you can view your ni record on the gov.uk website so that

09:50wraps up six key things to do by the 5th of april to protect your money and maximize your tax allowances

09:57before everything resets for the next personal tax year this video is for educational purposes and is

10:03not tax advice if you found the video helpful please do subscribe to my channel give the video a like

10:09and i'll see you on the next video

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