Financial Resolutions for 2017

January 2017
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The New Year is the ideal time for getting finances in order, particularly as some key deadlines happen in January. Below are LEBC’s Financial Resolutions to make the most of this critical time.

  1. Be sure to file your tax return and pay any tax you owe, the deadline for this is 31 January. After then fines and penalties apply for late filing and payment.

  2. Review the income you expect to receive in this tax year. Is it as tax efficient as it could be? If you are drawing income from shares there is now a £5,000 p.a. tax free allowance for dividend income but higher and additional rate taxpayers may pay higher rates on dividends above this level.

  3. Review your capital gains and losses. The tax free allowance of £11,100 has to be used by 5 April. Realising gains and losses each year can reduce the total tax you pay on your investment growth.

  4. Use your allowance for tax free ISA saving. Adults can add up to £15,240 before 5 April and £20,000 from 6 April 2017. Under 18s can save £4,080 this tax year rising to £4,123 next tax year.

  5. If you have larger pension funds built up, consider applying for a higher lifetime allowance. Up to 5 April an allowance of up to £1.5 million is available for those with pensions in excess of £1.25 million as at 5 April 2014

    The lifetime allowance is now £1 million. If you have funds in excess of this additional tax charges may apply to the excess. There are other forms of lifetime allowance protection you may be able to apply for to reduce the impact of this tax.

  6. If you have taxable income over £100,000 there are tax benefits in making additional pension contributions or gift aid donations which may restore your personal tax allowance. This may give an effective rate of relief of 60% making retirement saving and charitable giving more affordable.

  7. Parents of children under 16 or age 20 if still in education, receive child benefit, a tax free benefit unless one of you has income of £50,099 or more. Making pension contributions and charitable gifts can restore eligibility for this.

  8. Review your pension savings. Your allowance for tax relief on pension savings of up to £40,000 p.a. is granted at your highest income tax rate. Relief not claimed can also be carried forward for up to 3 years after the end of the tax year but drops off each 5 April.

    If your taxable income is more than £110,000 you may have a reduced allowance. Using up earlier years' relief will be even more important to you so act well before 5 April.

  9. If you are already over State retirement age, you have a one off opportunity to buy an additional State Pension of up to £25 per week but need to act before 5 April.

  10. Review the gifts you have made over the tax year and consider whether you wish to make any additional gifts. Up to £3,000 per tax year can be gifted as one off capital sums and will be exempt from inheritance tax. This is in addition to gifts made on marriage and small gifts below £250 per person.

    Allowances not used in the tax year can be carried forward for 1 year.


If you would like to find out more on any of the above, please do not hesitate to contact your adviser.

Please remember, no news or research item is a recommendation or advice to buy. LEBC Group Ltd is not responsible for accuracy and may not share the author’s views. If you are unsure of the suitability of any investment for your circumstances please contact an adviser. All investments can fall as well as rise in value so you could get back less than you invest. 

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