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UK General Election – 5 steps to prepare your finances in 2024
Taxes are always at the top of the agenda during elections and this time is no different.
With the government’s financial resources very tight, it is unlikely that we will achieve specific and immediate tax cuts promised by anyone.
But we could see vague statements about the direction of travel and a lot of hope that one day we would be able to hand over less of our hard-earned money to the taxman.
When it comes to potential tax rises, we’re unlikely to find out what awaits us until a chancellor is fully ensconced in Number 11 and presents a budget.
However, there are things we can do to prepare today. This way, we can be sure not to pay more than our fair share of taxes, regardless of who wins the election.
This article is not personal advice. If you’re not sure what’s right for you, ask, ask Financial advice.
ISA, pension and tax rules can change, and any benefit depends on individual circumstances. Remember that you can’t normally withdraw money from a pension until at least age 55 (rising to 57 from 2028). Investments can wax and wane, so you could get back less than you invest.
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Take advantage of this year’s capital gains tax deduction
We have seen taxes on investments increase significantly over the last two years.
If you have made gains on investments outside of a IT IS A or pensionIt’s worth evaluating whether it makes sense to use your capital gains tax deduction this side of the election.
If you are accumulating a gain and can realize it over the years, make a plan for how you want to do it and when to start.
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Protect your investments in an ISA
The best way to protect investments from taxes is to keep them in a IT IS A. This way, they are protected from UK income and capital gains tax.
You can also transfer existing investments into ISAs via a share exchange (sometimes called a Bed and ISA), so you can house up to the full £20,000 allowance in the current tax year.
O annual pension allowance it’s £60,000 for most people. This is the maximum amount you can contribute to your pensions each tax year without triggering a tax charge.
Pension contributions include those made by you, your employer or anyone else, in addition to obtaining tax relief added by the government. Increasing your overall pension.
The fact that you can also get a tax break at your highest marginal rate means that higher earners should take advantage of as much as they can, whatever makes sense for their finances.
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Don’t forget the rest of your family
O Junior ISA the grant has been £9,000 per year since April 2020 – the highest this grant has ever been.
This means there is a real opportunity to set aside a nest egg for your children while protecting that money from taxes.
Junior ISAs have all the same UK tax protections as standard ISAs.
Children go free
Enjoy better value family investments with the HL Junior ISA.
Last year we removed charges from our JISA account, so more of what you pay benefits your child. Depending on the investments you choose, other fees may still apply.
Frozen thresholds mean that more people will start paying higher rates of tax, at which point their personal savings allowance will decrease significantly (from £1,000 for basic rate taxpayers to £500 for higher rate taxpayers or £0 for basic rate taxpayers). additional fees).
This means it’s worth considering a ISA money.
This has the added advantage that if the next government made changes to the personal savings allowance, your money would be protected from tax in an ‘ISA wrapper’.