Year-end tax planning ideas for individuals: our Tax Director’s top tips 

With the 2024/25 tax year ending on 5 April 2025, there is still time for you to make some tax savings for 2024/25. 

Liam Coulter, Tax Director at Wilson Nesbitt, gives his tax tips to maximise the reliefs and allowances available to reduce your personal tax liability. 

Boost your pension 

Check how much you’ve paid into your pension so far this tax year. 

Pension contributions offer one of the most effective ways to reduce taxable income, but payments into pensions have to be made before the end of the tax year: 

• Annual Allowance: For 2024/25, the standard Annual Allowance is £60,000. If you have unused allowance from the three previous tax years, consider “brought forward” contributions. Unused allowance relating to Tax Year 2021/22 will drop away after 6 April 2025 if not used. Note that exceeding the Annual Allowance can lead to a tax charge. 

• Tapered Allowance: High earners should assess whether they are affected by the Tapered Annual Allowance, which reduces the limit for those with adjusted income over £260,000. 

It’s important to note that if you’re not working but are under age 75, you are still able to contribute to a pension and receive income tax relief. You can pay up to £2,880 each tax year into a pension, boosted by tax relief to £3,600. 

Maximise your Annual Allowance and reliefs 

Personal Allowance:  

• Plan your income to ensure that your tax-free Personal Allowance (£12,570 for most taxpayers) is not lost. 

• If you’re married or in a civil partnership, you may want to move some of your assets into the name of the person who is the lower-rate taxpayer or who doesn’t work, so you can minimise your tax liability.  

• If your income is lower than the Personal Allowance, the marriage allowance may allow you to transfer up to £1,260 to your partner.  

• Income exceeding £100,000 reduces the Personal Allowance by £1 for every £2 earned above this threshold.  Can you bring your assessable earnings under this threshold and preserve your Personal Allowance if your income is over £100,000, by making pension contributions or gift aid donations? 

Capital Gains Tax Allowance:  

• Use your £3,000 CGT annual exemption before the tax year ends to offset gains on investments or property (excluding your primary residence). 

• If you’ve incurred losses on investments or in business, ensure these are reported and offset against gains or income. 

Special allowances for savings and dividends: 

If you have savings or investments, there are extra allowances to know about that might save you money. The Personal Savings Allowance lets you earn some interest on your savings without being taxed. How much depends on your tax bracket: 

• Basic rate taxpayers (20%) can earn up to £1,000 in savings interest tax-free. 

• Higher rate taxpayers (40%) have a lower limit of £500. 

• Dividend allowance – you can earn up to £500 in dividend income tax-free, regardless of your tax bracket. 

Make gifts for IHT planning 

If inheritance tax (IHT) is a concern, consider making gifts to reduce the value of your estate: 

• Use the annual gift allowance of £3,000 per person, which can be carried forward one year if unused. 

• Make regular gifts from surplus income, ensuring they meet HMRC’s “normal expenditure out of income” rules. 

• You can give as many £250 gifts per person as you want during each tax year, provided you haven’t already given a gift to the same person using your £3,000 exemption. 

Use your ISA allowance 

• You can put up to £20,000 into tax-efficient individual savings accounts (ISAs) in the current tax year.  

• Your gains within an ISA are free from capital gains tax (CGT), so it makes financial sense to use this allowance, particularly if you’re a higher or additional-rate taxpayer.  

• No income tax is payable on interest or dividends received within an ISA.  

• If you’re married or in a civil partnership, you could save more between you, effectively doubling your combined allowance to £40,000. 

National Insurance Contributions – pay for any missed years 

Men born on or after 6 April 1951 and women born on or after 6 April 1953 can claim the new State Pension when they reach retirement age. To get any new State Pension, you usually need 10 qualifying years on your National Insurance record, and to get the maximum you must usually have about 35 qualifying years (it may be more if you were contracted out). 

A qualifying year will usually be one in which you were: 

• Working and made National Insurance contributions (NICs); 

• Receiving National Insurance credits, such as if you were unemployed, ill or a parent or carer; or 

• Paying voluntary NICs. 

• If you’ve got gaps in your National Insurance record, you may be able to pay voluntary Class 2 or 3 NICs, to increase the amount of new State Pension you can receive. 

You can check your State Pension forecast to find out how much you could receive when you reach State Pension age and to see your National Insurance record. 

You can usually pay voluntary NICs for the previous six tax years. For example, you can make voluntary contributions up until 5 April 2030 to make up gaps for the 2023-24 tax year. 

For men born on or after 6 April 1951 and women born on or after 6 April 1953, the deadline for making payments to fill in gaps in your National Insurance record between 6 April 2006 and 5 April 2018 has been extended to 5 April 2025. After this date, you will only be able to make payments for the previous six tax years. 

If you might benefit from paying voluntary NICs, ahead of the 5 April 2025 deadline you should: 

• Check your National Insurance record using the HMRC app or online service. 

• Check whether you will benefit from making voluntary NICs, and if so, how much you should pay. 

How we can help 

Our experienced tax team here at Wilson Nesbitt can help with any personalised tax planning or discuss upcoming changes that impact on your tax affairs. 

To discuss your tax options with Liam, get in touch with us here.