Archived article: This article was correct at the time of publishing. Tax, investments and pension rules can change over time so the information below may not be current.

Have you used your annual tax allowances yet?

As we enter the second half of the 2017/18 tax year, at Bestinvest we think now is the perfect time to ask yourself – am I making the most of my annual allowances this year? After all, for most tax allowances it’s a case of ‘use it or lose it’. If you need a nudge in the right direction, here is a reminder of this year’s generous allowances. How much tax could they save you?

£20,000 tax-free ISA savings

This tax year saw a big increase in the annual ISA allowance. You can now save up to £20,000 in your cash or Stocks & Shares ISA without paying any Capital Gains Tax or Income Tax. If you need some ideas for your ISA investments, you can find our top investment ideas for your ISA in our free guide.

Your pension annual allowance

This year you can pay as much as you earn into your pension, usually up to £40,000. If you are a higher earner your annual allowance will reduce to as little as £10,000. But however much you earn, you may still be able to make contributions above your annual allowance through pension carry forward.

It’s worth remembering that the Government adds generous tax relief to whatever you pay into your pension. Depending on how much Income Tax you pay, your pension contributions will be boosted by up to 45% – so a £100 contribution could cost you as little as £55.

Capital Gains Tax – the forgotten allowance

The Capital Gains Tax allowance is less well-known than the ISA and pension allowances, but it can be equally valuable. This year the allowance is £11,300. You will pay Capital Gains Tax on any profits you make on investments held outside an ISA or pension above this amount. The allowance doesn’t roll over between tax years, so you will need to plan carefully if you want to make use of this allowance.

Dividends and the Personal Savings Allowance

This year you can receive up to £5,000 of dividend income from shares held outside a pension or ISA without paying any tax. You also have a Personal Savings Allowance for interest payments from your savings accounts. The allowance is £1,000 for basic-rate taxpayers and £500 for higher-rate taxpayers, but disappears for additional-rate taxpayers.

Do you have questions about your tax allowances?

Our friendly, UK-based experts are on hand to answer all your questions about using your annual tax allowances. You can get in touch by requesting a call back, calling us on 020 7189 9999 or emailing best@bestinvest.co.uk.