It is hard to believe we’re already approaching the end of another UK tax year. A tax deadline means it’s time to review what you can do to ensure you are maximizing tax-efficiencies. Of course, some of these are only possible for non-US persons living in the UK. We will outline who this impacts in this article.
- Use up your ISA allowance (non-US persons): If you have any available ISA allowance left, consider using it before the end of the tax year. Any unused allowance does not roll over into the next tax year, so it is important to use it before it is lost – even if it is to build your emergency fund. If you can make sure you make you contribution for the next tax year (2023-24) as soon as you can on or after April 6th.
- Contribute to your pension (US and non-US persons): Contact your Tax Advisor to discuss if maximizing pension contributions before the end of the UK tax year are beneficial to your circumstances.
- Make use of capital gains tax allowances (US and non-US persons): The 2022/23 UK capital gains tax allowance is £12,300. This will reduce after this tax year. Maximize your allowance before the end of the UK tax year. In particular, if you have a US portfolio and are subject to UK taxes, it’s a good time to maximize the allowance given the GBP/USD exchange rate has moved against UK tax residents.
- Review your expenses (US and non-US persons): If you are self-employed, you can review your expenses to ensure that you have claimed for everything that is allowable. This can help reduce your taxable income and potentially reduce your tax liability.
- Dual-qualified charitable donations (US and non-US persons): Donations to charities can be tax-efficient from a dual US and UK perspective. In the UK, they may be eligible for Gift Aid. This means that the charity can claim an additional 25% on top of your donation, and you claim tax relief on the donation. If using a dual qualified vehicle to gift, your donation can also be US deductible.
If you are a Tanager client, your team of experts will be reviewing the benefits of numbers one through three. We will be in touch over the coming weeks.
If you are not a Tanager client, we recommend contacting your Financial Advisor or Tax Advisor to discuss which of these make most sense for you.
These are just a few examples of the things that a UK taxpayer can do before the UK tax year end to potentially maximize tax efficiency. It is always advisable to seek professional advice to ensure that you are making the most appropriate decisions for your personal circumstances.