Here are a few figures worth knowing in 2020–21 to help maximise your tax allowances and exemptions:
The National Insurance threshold is £9,500 and the Personal Allowance remains the same as last year, at £12,500.
The Annual Allowance for pensions is £40,000 and begins to taper (to a minimum of £4,000) for those who have an income above £240,000.
The Lifetime Allowance – the maximum amount you can have in a pension over a lifetime – has increased to £1,073,100.
From April, the new single-tier State Pension has risen to £175.20 per week and the older basic State Pension increased to £134.25 per week.
The annual amount you can save into a JISA (Junior Individual Savings Account) or Child Trust Fund has increased substantially, from £4,368 to £9,000. The ISA (Individual Savings Account) allowance, including the Lifetime ISA allowance if used, is £20,000.
Inheritance Tax (IHT)
The current IHT nil-rate threshold is £325,000 for individuals and £650,000 for a married couple or civil partners. Beyond these thresholds, IHT is usually payable at a rate of 40%. The main residence nil-rate band, which may apply if you leave your main residence to a direct descendant, is £175,000.
We can advise you on taking sensible steps to reduce the amount of tax you pay, on the path to achieving your financial goals.