Roses are red, violets are blue. We’re thinking of the tax year end, how about you?

All that fuss about Valentine’s Day when really, the most important date in early spring is the end of the financial year! Ok, so it’s not exactly romantic, and no one makes cute cards about it (yet), but overlooking it can mean you are not using allowances effectively. By checking your finances now, you can ensure you are minimising your tax liability and maximising your savings.

Here’s our quick guide to the things you need to think about ahead of the 5th of April.

We recommend that you should always speak to a financial adviser to ensure that any actions are appropriate for your circumstances.

 1. Use your ISA allowance

Currently, the total you can pay into your Individual Savings Account (ISA) annually is £20,000. It’s a tax-efficient way to save, as any income from investments or interest is tax free, as are the capital gains. Could you invest in a cash ISA or a stocks and shares ISA, or add to existing investments?

Younger people (generally speaking, those aged under 50), including those saving for their first home, could also benefit from saving into a lifetime ISA. Subject to certain criteria being met, the Government pays an additional 25% on the amount invested up to a subscription allowance of £4,000 in this tax year (which forms part of the overall £20,000 allowance).

2. Pay into your pension

We all know the importance of saving for the future, but did you also know that investing into your pension can be a tax-efficient form of saving? Not only is there the potential to receive tax relief on your contributions, up to the highest level of income tax you pay, but you can also benefit from tax-free growth on investments held within the pension itself. What’s more, contributing into a pension could move you into a lower income tax bracket.

In this tax year, up to 100% of an individual’s UK earnings can be contributed to a pension to receive tax relief, subject to the annual allowance of £40,000. Unused allowances from the preceding three tax years can potentially be ‘carried forward’ to be used in this tax year.

However, this is a complicated area, with important considerations for those who have drawn income from their pension and those whose income exceeds £240,000. Those with larger pensions must also consider the lifetime allowance. It is currently £1,073,100 (and it has been frozen at this level until the 2025/26 tax year), which may present further issues for people with a protected lifetime allowance, that could be lost if certain criteria are not met.

3. Consider your capital gains annual exempt amount

In 2021/22, capital gains tax (CGT) may be payable on capital gains realised above the exempt amount of £12,300. The CGT rate on investments is 10% for basic rate and 20% for higher/additional rate taxpayers. For gains made on the sale of properties other than a primary residence, the rates are higher at 18% and 28%, respectively.

Selling investments up to the exempt amount could save CGT of up to £4,920 for a couple who are both higher rate taxpayers, potentially enabling them to rearrange funds in their portfolio or to generate funds for their ISA allowances.

4. Think sustainably

If you’re reviewing your finances, it’s a good opportunity to consider investing sustainably. At Holden & Partners, we’re experts in advising people on sustainable investments and why they make sense, not just for the planet but for your pocket too. Our own research and independent studies reveal that a sustainable portfolio can outperform a more traditional set of investments. 1

We offer a variety of sustainable options for you to consider.

5. Consider gifting

If you’d like to gift money to loved ones and see them benefit from it while you are alive, it is possible to do so, and it can result in reducing future inheritance tax bills. You can gift a total of £3,000 each tax year (to one person or split between several) without affecting the value of your estate. Once the current year’s allowance has been used, any unused allowance from the previous tax year can be carried forward, potentially meaning a gift of up to £6,000 could be made without incurring inheritance tax.

Gifts out of surplus income are also exempt, provided they meet certain criteria.

For more info on the intricacies of gifting, look here.

6. Check if you qualify for marriage allowance

Tax can be romantic after all! This little-known benefit enables the lower earner to transfer £1,260 of their personal allowance to their wife, husband or civil partner. This can reduce their tax by up to £252. To benefit as a couple, the lower earner must have an income below the personal allowance threshold – currently £12,570.2

You can calculate any potential tax savings here.

7. Give to charity

The pandemic has had a profound impact on charities, increasing demand for their help whilst making it harder to fundraise.3 If you are able, there has never been a better time to donate. Many people are familiar with Gift Aid, and potentially another very efficient way to give to charity is to gift investments.

The value of the donation is deducted from taxable income, exempt from capital gains tax and immediately outside of an estate for inheritance tax purposes – all while enabling you to support a cause close to your heart.

8. Reclaim your income tax personal allowance

Those with income between £100,000 and £125,000 suffer an effective tax charge of 60% on this slice of income as the personal allowance for income tax is gradually removed. Making pension contributions or gifting to charity can help to reclaim the personal allowance, lowering the overall tax paid.

9. Save for your children

Children can benefit from tax-efficient saving too. The junior ISA allowance was increased generously for this tax year and is currently £9,000 (per child under the age of 18).4 By contributing, access to the funds is given up, but control is retained over how it is invested. Once the child reaches age 18, the account becomes an adult ISA and is the child’s property outright.

You could also consider investing for their retirement, by setting up and making regular contributions into a pension.

10. Further options

Once other allowances are used, additional higher risk options might be considered. These include Venture Capital Trusts (VCTs), Enterprise Investment Schemes (EIS) and Seed Enterprise Investment Schemes (SEIS). These schemes offer tax incentives to encourage investment into smaller UK companies. On top of income relief of 30% (50% for SEIS), VCTs benefit from tax-free dividends, while EISs can be used to defer a capital gains tax liability and may qualify as inheritance tax-exempt if held for two years.

These investments are generally only suitable for certain individuals who can afford to take a high level of risk with their capital and are seeking to invest for at least five years.

And finally, a little eco-friendly romance tip – if you’re buying flowers for Valentine’s Day, you can reduce your carbon footprint by avoiding the imported blooms.5 British grown daffodils and spring flowers are a much greener and more ethical way of saying ‘I love you’.

We’re here to help with financial planning and sustainable investments. Why not get in touch for a chat?

We have received lots of positive feedback about our updates. If you’ve found them useful and informative, we would be delighted for you to share them with friends, family and work colleagues. We are always keen to spread the word about our unique approach to financial planning and investing.

Please note that any thresholds, allowances, percentage rates and tax legislation stated may change in the future. The content of this communication is for your general information and use only; it is not intended to address your particular requirements. This communication should not be deemed to be, or constitute, advice. You should not take any action without having spoken with your usual adviser.

1 For example, since its launch in 2014, Holden & Partners’ Sustainable Balanced Portfolio has consistently outperformed the industry standard Investment Association Mixed Investment benchmark. Past performance is not a guide to future returns. The value of investments can go down as well as up and you may get back less than they invest.

2 Marriage Allowance – GOV.UK (

3 What new research tells us about the impact of COVID-19 on charities – Charity Commission (

4 Junior Individual Savings Accounts (ISA) – GOV.UK (

5 The carbon footprint of flowers – Flowers from the Farm

Contact us

Whether it’s a question about your personal finances or how you can invest your wealth more ethically, we are here to help. Call us on 020 7812 1460, email or complete the form: