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It’s that time of year again…the run-up to the tax year end on 5th April 2020 provides an opportunity to finalise your affairs for the 2019/20 tax year. The recent general election meant the usual Autumn budget was deferred from October and is now scheduled to take place on 11th March 2020.

In uncertain times, it’s easy to let life’s dramas and global events distort your judgement. The risk is that you delay the actions that can help you achieve financial security for yourself and your family. That includes taking advantage of the valuable tax breaks offered each tax year.

How much tax will you pay on your investments? Is your pension planning on track to provide the retirement lifestyle you would like? How much of your wealth could pass on to your family free of Inheritance Tax? It’s in your control. Whether it’s planning your investments or your legacy, now is the time to act before the tax year-end deadline on 5 April.

Our advisers will of course write separately covering any changes that may have implications for investors. In the meantime, we outline below the easiest ways to ensure your finances are managed tax efficiently:


The ISA allowance of £20,000 per tax year provides a great opportunity to move funds into a tax-free growth environment. This can be funded from cash or by recycling other investments in your investment account, potentially also utilising part of your Capital Gains Tax allowance.

A Flexible ISA also allows you to replace any funds withdrawn within the same tax year without it counting as part of the annual allowance.

Finally, you could also make provision for children under 18 using the Junior ISA. You can contribute up to the £4,368 allowance annually. You give away all access to the funds, though retain control over the investment. Once the child turns 18, these accounts turn into normal ISAs and become the children’s outright.


Pensions are extremely tax efficient, generally benefiting from; tax relief on contributions; tax-free growth, 25% tax-free cash entitlement on retirement and exemption from your estate for IHT purposes.

Current UK legislation allows you to contribute up to 100% of your UK earnings each tax year and receive tax relief, up to the annual allowance of £40,000. Unused allowance from the preceding three tax years can potentially be “carried forward”.

However, there are complexities with pension regulations including reduced contribution allowances for those who have drawn income from their pension benefits (Money Purchase Annual Allowance) and those whose income exceeds £150,000 (Tapered Annual Allowance). Those with larger pensions must also be wary of exceeding the Lifetime Allowance (currently £1.055M). Given these complexities, it is therefore crucial you seek advice to ensure you benefit from the expected tax efficiencies.

Capital Gains Allowance

Capital Gains Tax (CGT) is payable on your total capital gains above the tax-free allowance of £12,000. The CGT rate on investments is 10% for basic rate and 20% for higher rate taxpayers. For properties other than your primary residence, the rate remains higher at 18% and 28% respectively. Using your CGT allowances annually can save tax on investments of up to £4,800 for a couple liable to higher rate tax, enabling portfolio rebalances and potentially releasing funds to utilise ISA allowances.

Charitable Donations

Philanthropic donations benefit both the donor and recipient. Many people are familiar with Gift Aid, but even more efficient is the gifting of investments. The donation is deducted from your taxable income, exempt from CGT and is immediately outside of your estate for IHT purposes.

Inheritance Tax

You are able to gift up to £3,000 annually which is exempt from IHT. Once the current year’s allowance has been used you can carry forward any unused exemption from the previous tax year, enabling a gift of up to £6,000. Gifts out of surplus income are also exempt provided they meet certain criteria.

Personal Allowance

Those with annual income falling between £100,000 and £125,000 suffer an effective tax charge of 60% due to the loss of your tax-free personal allowance. Making pension contributions or charitable gifts can reclaim the personal allowance by adjusting your effective income.

VCT and EIS Investments

A further, higher risk option to potentially consider once other allowances are used are Venture Capital Trusts, Enterprise Investment Schemes and Seed Enterprise Investment Schemes. They offer substantial tax incentives to encourage investment into small companies. On top of income relief of 30% (50% for SEIS), VCTs benefit from tax-free dividends, while EIS’s shelter CGT and are IHT efficient once held for 2 years. They are usually only suitable for certain investors who can tolerate high risk to their capital and are planning to invest for at least 5 years.

If you would like to know how you might benefit from available tax exemptions then please do contact one of our advisers who would be more than happy to provide you with a free, no obligation meeting to discuss your personal circumstances.

If you would like to know more about how we as Financial Advisers can help you set, plan and achieve your financial goals then financial planning section of  our website: Financial Planning or send us email at: [email protected]

The information contained in our website is for guidance only and does not constitute advice which should be sought before taking any action. The information is based on our understanding of legislation, whether proposed or in force, and market practice at the time of writing. Levels, bases and reliefs from taxation may be subject to change. Accordingly, no responsibility can be assumed by Fiducia Wealth Management Limited, or any associated companies or persons, its officers or its employees, for any loss occurred in connection with the content hereof and any such action. Professional financial advice is recommended for every case.

Fiducia is a multi award-winning firm of Financial Advisers based in Dedham near Colchester situated in the heart of Constable Country on the Essex Suffolk border.

Fiducia Wealth Management Ltd. Dedham Hall Business Centre, Brook Street, Dedham, Colchester, Essex, CO7 6AD.

Fiducia Wealth Management Ltd. is authorised and regulated by the Financial Conduct Authority. FCA No. 408210