Knowledge of tax allowances & relief 2024/25 is essential for reducing your tax liabilities, whether you’re an individual or a business. The UK offers various allowances and reliefs designed to help taxpayers optimise their finances. By understanding and using these opportunities, you can save significantly on taxes. Below, we break down the key allowances and reliefs for the 2024/25 tax year and how to make the most of them.
Income tax forms a significant portion of personal tax liabilities. However, you can reduce your payments through available allowances:
To achieve efficient UK Tax Planning, review these allowances annually and adjust your strategy as needed.
For 2024/25, the annual CGT allowance is £3,000. Gains above this are taxed at:
For residential property sales, rates increase to 18% and 28%, respectively. Use tax-efficient investment options like ISAs to shelter your gains from CGT. Selling assets strategically to stay within the allowance is another effective way to optimise your finances.
Individual Savings Accounts (ISAs) offer a tax-free method to grow your savings and investments. The annual ISA allowance remains at £20,000 for 2024/25. Returns from ISAs, including interest and dividends, are free from income and capital gains tax. Maximising this allowance is a straightforward way to improve your UK Tax Planning strategy.
Pension contributions not only prepare you for retirement but also provide significant tax benefits:
Additionally, when you turn 55, you can withdraw 25% of your pension pot tax-free. Regular contributions are a smart way to lower your taxable income.
Inheritance tax (IHT) is charged at 40% on estates over £325,000. With the Residence Nil Rate Band, you can pass on an additional £175,000 tax-free if you leave your home to direct descendants. Couples can therefore pass on up to £1 million without incurring IHT.
To reduce IHT further:
Developing Inheritance Tax Strategies ensures that your estate benefits your loved ones rather than being reduced by tax liabilities.
Managing Tax Allowances & Relief 2024/25 can be overwhelming, especially as tax rules change. At Apex Accountants, we simplify this process by offering:
Are you using all your available Tax Allowances & Relief 2024/25? Contact Apex Accountants today for expert UK Tax Planning and tailored advice on Inheritance Tax Strategies. Together, we can reduce your tax liabilities and secure your financial future!