7 tax allowances to remember to take advantage of this tax year end

1. Make the most of your clients’ Personal Income Tax Allowance

The 7IM SIPP, available on the 7IM Platform offers you and your client the flexibility to take income in a way which suits their needs. If your client would like to take income up to their marginal rate of income tax (usually £12,570), this can be done using Tailored Drawdown, a series of regular Uncrystallised Fund Pension Lump Sums (UFPLS). Every month, the platform will crystallise the required amount, of which 25% could be paid as tax-free cash. Should you then wish to take some or all of the remaining 75%, this will be taxed at the client’s marginal rate of income. Other methods of taking income from the 7IM SIPP include:

• Take a one-off tax-free lump sum only
• Take a one-off tax-free lump sum and then regular income
• Uncrystallised Fund Pension Lump Sum (UFPLS)

And don’t forget… you can guarantee some or all of the income for your clients through the purchase of a Secure Lifetime Income (SLI) option on the 7IM Platform.

Content quick find

1. Make the most of your clients’ Personal Income Tax Allowance

2. Make the most of your clients’ Pension Annual Allowance

3. Carry Forward unused allowances

4. Junior SIPPS

5. ISAs – use it or lose it

6. Junior ISAs

7. Managing Capital Gains Tax using the 7IM Platform

2. Make the most of your clients’ Pension Annual Allowance

Has your client made the most of their annual allowance this tax year? The standard pension annual allowance limit for this tax year is the lower of £40,000 or 100% of a client’s earnings, subject to tapering for high earners and the Money Purchase Annual Allowance. Where the client has no earnings, the limit of £3,600 applies. We can provide you with a list of existing 7IM SIPP clients who have remaining contribution allowances for the current tax year. And remember, we prefund tax relief, so it is invested the same day we receive the client's contribution.

3. Carry Forward unused allowances

If your clients have been unable to make full use of their pension annual allowances over the previous three tax years, they might be able to benefit from making a larger contribution in the current tax year.

For more information, please see HMRC Carry Forward rules.

4. Junior SIPPs

Did you know you can open Junior SIPPs via the 7IM Platform for your client's children? Currently, you can save up to £3,600 pa gross into a child’s Junior SIPP. And like a regular pension, the government will also provide tax relief of 20% on contributions.

5. ISAs – use it or lose it

With a £20,000 allowance each tax year, ISAs continue to be one of the most tax-efficient ways to save as they allow your clients to earn interest or grow their investments free of tax. In addition, withdrawals don’t suffer any capital gains or income tax. 7IM ISAs are flexible and any cash withdrawn can be reinvested during the same tax year.

ISA allowance reports are available to check how much allowance remains for your client. We also have the Bed & ISA tool where you can sell from the GIA, move cash into the ISA and reinvest all on one page.

6. Junior ISAs

A Junior ISA (JISA) is a great way to help your clients’ children (or grandchildren) build their wealth. Like the adult version, there’s no tax to pay on any interest or returns within a JISA. The JISA annual allowance currently stands at a generous £9,000 and while an account can only be opened by the child's parents or legal guardians, anyone can pay into it.

7. Managing Capital Gains Tax using the 7IM Platform

This tax year’s capital gains tax (CGT) allowance is £12,300 per individual but will be cut to just £6,000 in the next tax year. We have a range of reports and tools available on platform to help you manage your clients’ CGT allowances.

You can download a CGT summary report from the 7IM Platform covering all your clients: Reports > Tax > CGT Reports > All Clients CGT Report