When is a tax year end not a tax year end?
Published: 08/02/2021 By Martin CardIt is around this time of year that financial planners are talking to their clients in the lead up to the year end of 5th April.
“Dear client it is important that you make use of your ISA/ pension annual/ capital gains tax allowance for the current year” delete as appropriate.
This is considered to be essential financial planning advice so that we use it or lose it. However, this year I think things are a little different.
This year, perhaps more than last year, we are in unknown territory. We now have a massive COVID chasm.
The UK now has more than £2 trillion in debt, massively increased because of necessary borrowing to help us out of this COVID crisis. This debt must be serviced and hopefully paid back. But how?
There are a few routes that the Government can take but included in them it seems likely that taxation in one form or another will be affected. So, what does that mean for you?
It means even more so now you might want to be taking up your financial planner’s advice and making use of those valuable allowances this year to benefit from taxation allowances that you have, to protect some of your wealth from future income and capital gains tax, to pay income and capital gains tax now at a rate that could well be lower than it is in the future.
But we have two months I hear you cry. Well no. Although the tax year end remains the 5th of April, perhaps this year we should be looking upon it as Budget Day, the 3rd of March, because following that we could be seeing a completely different taxation landscape and we may not like the look of it.
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