Tax year end ISA checklist

The current tax year ends at midnight on April 5th, and there are a few things you could consider to ensure you're making the most of the final week of the 2019/20 tax year. So what are your options before the deadline?

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The following information should not be treated as personal advice - it's provided to help you make your own investment decisions. All investments rise and fall in value, which means you could get back less than you invest. As always, if you're unsure, please seek professional advice.


1. Secure your full ISA allowance

The current ISA allowance for the tax year end April 2020 is £20,000. If you want to protect your savings or investments from UK tax then you have until midnight on the 5th April. This allowance can't be carried over - use it or lose it.

There are a number of ISA options for your savings or investments;

  • Cash ISA

  • Stock and Shares ISA

  • Innovative Finance ISA

  • Lifetime ISA




One common question is - how many ISAs can I open in one tax year? If you're over 18 years of age you can open one of each of the above. This can be a useful strategy when investing in turbulent times. It also gives you the opportunity to weight your portfolio to align with your risk appetite and investment goals.

Read more: download the Innovative Finance ISA guide


2. Top up your pension for tax relief

If you're under 75, a UK resident and pay into a private pension, then you will automatically receive tax relief of 20%.  If you're a higher rate tax payer, then you can boost this further by claiming an additional 20% or possibly 25% through your annual tax return. Please note - for Scotish taxpayers the rates are different.

The current annual pension allowance is £40,000 and contributions would need to be made before midnight on the 5th of April to secure this year's tax relief.


3. Use your children's Junior ISA and pension allowances

Any parent or legal guardian can set up a Junior ISA for their child. The current allowance for a Junior ISA is £4638 - family and friends can contribute as well. When your child turns 18 the Junior ISA automatically converts to a standard adult ISA which they control. A Junior ISA, with the benefit of tax free returns, can give your child a headstart with help towards university fees or buying their first home.

Looking further ahead - you may also want to consider a Junior SIPP.  You could contribute up to £3,600 this tax year and the government will then pay 20% tax relief (upto £720). This means a total contribution of £3,600 only costs you £2,880.


Other options for experienced investors

For experienced investors and higher rate taxpayers, there's also the option of reducing capital gains tax and inheritance tax using more advanced tax efficient investing schemes such as;

  • Seed Enterprise Investment Scheme (SEIS)

  • Enterprise Investment Scheme (EIS)

  • Venture Capital Trusts

With tax reliefs of between 30% and 50% (can be higher when taking into account potential capital gains tax relief) - these schemes can be advantageous for sophisticated investors and high net worth individuals.


The Innovative Finance ISA Guide

The CARLTON Bonds product is available exclusively to experienced investors who are classified as either sophisticated investors, high-net-worth individuals or professional investors and have the knowledge and experience to make their own investment decisions. Investments are high risk and illiquid, your capital is at risk and returns are not guaranteed. Bonds are not protected by the Financial Services Compensation Scheme (FSCS).