By James Marlow, Regional Financial Planning Manager, Armstrong Watson LLP

ALTHOUGH the current tax year doesn’t end until April 5, 2022, effective financial planning shouldn’t be a mad March rush. Starting your financial planning early in the year will give you a head start.

Often, as the end of the tax year is approaching, there are many financial commentators and institutions writing/advertising about how you should make sure you don’t lose your valuable tax allowances. The reasons being that they allow you to reduce your tax bill or use up an allowance that may otherwise be lost in that tax year.

There are several areas of financial planning to consider:

* Pension contributions: maximising your allowance this year and in previous years to avoid losing any allowances;

* ISA Allowance: maximising your annual tax-free allowance – currently £20,000 per person per year;

* Capital Gains Tax: using up any allowances and reliefs from your portfolios;

* Inheritance Tax: using up small exemption allowances but also making gifts and disposals in the current tax year;

* Income tax planning: reducing your income tax bill for high earners and those who receive child tax credit;

* Marriage Allowance: allows you to transfer a portion of your Personal Allowance to your husband, wife, or civil partner.

Each area needs careful thought as both financial and tax planning is subject to individual circumstances and all the options and allowances mentioned are not suitable for everyone.

Aside from making full use of available allowances there are other advantages to planning ahead, for example, by using your ISA allowance or making your pension contributions earlier you could benefit from extra potential growth, as well as receiving an element of your tax relief earlier on your pension and any pension contributions. Of course, there’s also the benefit of spreading your contributions over a tax year instead of in one lump sum at the end, when it might not be affordable to you at that time.

Planning ahead is essentially what financial planning is all about, but by working with a trusted adviser, you also benefit from being kept up to date on the latest position on pension & inheritance tax legislation and can be signposted to any new financial planning opportunities that might arise.

For help and support contact James Marlow on 0113 221 1327 or email for a complimentary initial consultation.