A sense-check of your allowances doesn’t need to be taxing

As the current tax year draws to a close (5 April 2024), now is the perfect time to review your finances and consider making the most of your personal allowances. These can include pension contributions, ISA subscription allowance, CGT allowances / personal savings allowance, and dividend allowance.

There are financial tools available which offer a tax-efficient way to save and invest, allowing you to shelter your money from both income tax and capital gains tax, whilst understanding the impact of tax regulation. Here is an overview of the key allowances you should take into account:


Pension Contributions

Pensions provide a tax-efficient means of long-term investment. Contributions benefit from tax relief, and the growth within the pension pot is also tax efficient. Typically, up to 25% of the total pension fund can be withdrawn tax-free upon accessing the pension. However, it’s important to note that funds cannot be accessed until the age of 55 (increasing to 57 in 2028), and any benefits beyond the tax-free 25% are considered taxable income.

Pension contribution calculations are dependent on the income earned in a tax year. Tax relief is available at source on the first £2,880 at basic rate (20%) for those not earning an income. Contributions vary based on income and any unused allowances from previous years. For higher rate and additional rate taxpayers, a pension contribution can also reduce your income tax liability.

Pension planning is a great way of reducing your current tax burden, whilst building a pot for your retirement plans. Moreover, it allows you to transfer funds tax efficiently onto others since, in most cases, pensions are outside of your estate for inheritance tax purposes. At Oakglen Wealth, we offer investment management services for Self-Invested Personal Pensions (or ‘SIPPs’).


ISA Allowance

Individual Savings Accounts (ISAs) are a simple and tax-efficient way of keeping your investments free from tax. It is important to note that this is a ‘use it or lose it’ allowance, which refreshes each tax year. Therefore, it is vital to act before the tax year ends. Utilising your ISA subscription allowance is especially important for taxpayers, as you will pay tax on savings interest over £1,000 for basic rate taxpayers and £500 for higher rate.


Here are the key points about ISAs:

  1. Annual Allowance: You can invest up to £20,000 using your ISA allowance for the 2023/24 tax year. For couples, this means a maximum of £40,000 could be sheltered within an ISA.
  2. Spousal Inheritance: In the event of your demise, your spouse can inherit the value of your ISA, ensuring that the funds remain within the tax-efficient wrapper.
  3. New “British ISA” Allowance: The Chancellor of the Exchequer announced in the Spring Budget plans to introduce a new £5,000 per year allowance focused on investing in UK companies. Further details will emerge after a three-month consultation.
  4. Junior ISAs: Consider the Junior ISA for children, with an allowance of £9,000 each tax year.


By subscribing to an ISA before the tax year ends, you can maximise your annual allowance and benefit from potential tax-free growth on your investments. Whether you’re saving for a rainy day, a substantial purchase, or your future retirement, taking advantage of ISAs can help you reach your financial goals while keeping more of your hard-earned money protected from tax.

At Oakglen Wealth, we offer Flexible Individual Savings Accounts (or “Flexi-ISAs”) and Junior Individual Savings Accounts (JISAs) for any children under 18 years old, giving you more freedom to withdraw money and, more importantly, put funds back again within the same tax year without affecting your annual allowance. This greater flexibility is crucial when creating a robust financial plan for you and your family.


Find out more about ISAs from the UK Government website here:
Individual Savings Accounts (ISAs): Overview – GOV.UK (www.gov.uk)


Capital is at risk.
Please note that Oakglen does not provide any legal or tax advice.




Don’t miss out on the opportunity to optimise your finances and secure a brighter financial future – speak to our Investment Director Edward Maidment or one of the UK Wealth Team about your options.

Edward Maidment
Investment Director


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