When the tax year ends, taxpayers can lose tax reliefs and tax allowance not used within the tax year!

In this blog , I have written some of the relief that you would need to claim if you qualify before the end of the tax year.

1.Tax allowances to reduce tax payable in the UK 

The personal allowance for tax relief for personal taxes or annual exemption for relief for capital tax!

Personal allowances reduce the tax you pay in your personal tax.

It’s used in determining the tax code used by the employers.

Individuals that dispose of capital items can also claim the annual exemption reduces the capital gain tax paid due.

The amount of relief available for the year 2019/20 is £11,700.

Both reliefs are lost If not used it’s lost at the end of the tax year.

 

2. Transfering of income-producing asset tax-free between spouses before the tax year ends.

  When a spouse or partner is a higher earner i.e. 40% or 45% and the other partner is a basic taxpayer, he/she can transfer the income-producing asset to the spouse or partner tax-free.

The reason is that when couples give transfer assets between themself , its is transferred at no gain or loss.

when this item has then transferred the partner paying tax at 40&% can have some of the income transferred to the other half thereby saving tax on the long run.

 

3.Claiming tax relief from pension contribution.

Tax relief is given to taxpayers that contribute to a registered pension scheme.

To prevent taxpayer claiming too much relief, therefore, abusing the system , there is a cap to how much relief a taxpayer can claim in a tax year.

The annual allowance for each taxpayer is £40,000.

They can, however, claim previous tax years allowance if the taxpayer is in a registered pension scheme in the tax year they are claiming the relief.

Although this is also capped if the adjusted net income is over £150,000.

 

4. Claiming Marriage Allowance before the tax year ends.

Marriage Allowance is another tax relief that could be lost when the tax year comes to an end!

This is because you can only claim relief from the previous 4 tax years!

The marriage allowance permits a spouse to transfer 10% of their personal allowance [£11850 in this tax year] to their spouse, therefore, saving 20% on their tax in total [£237 in real cash saved].

To qualify for this relief

• Both spouses must be paying tax at 20% [first band tax].
• One of the spouses must earn less than £11850 to be able to transfer some of their personal allowances.

 

5. Claiming tax relief from giving to Charity before the tax year ends.

When taxpayers that pay tax at 40% or 45% give to charity, they can claim tax relief at 20% or 25%.

This can also be backdated 4 tax years as well!

 

Conclusion

To ensure taxpayers enjoy this tax relief, they must ensure they claim the relief or take necessary actions

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