5th April 2013 is the last day of the 2012/13 tax year.
It is always worth remembering the adage that we “shouldn’t let the tax tail wag the investment dog” but two tax and investment advantages expire with the last day of the tax year.
The ISA allowance for the 2012/13 tax year is an important £11,280 and it is a use it or lose it deadline date.
If investing the full ISA allowance in this tax year makes financial planning sense then don’t forget to exploit it.
The ISA full allowance can be invested in a “stocks and shares” ISA or you can mix and match and up to £5,640 might be invested in a cash ISA with the balance invested into stocks and shares.
But don’t forget the investment aspects of this and get advice about the right underlying investment mix.
Pension contributions are also worth considering.
A pension contribution of £8,000 attracts 20% income tax relief automatically so a total of £10,000 is invested.
Higher rate tax payers (40%) can claim back a further £2,000 of higher rate income tax relief so a £10,000 pension investment really only costs £6,000.
And if tax is paid at the top rate of 50% well I am sure you can do the maths.
Check to make sure that you are eligible to pay the pension contribution which together with all other pension contributions mustn’t exceed 100% of your earnings or £3,600 gross if you have no earnings.
Obtain advice if you need to but remember that you will need to have your ISA and Pension contributions and any documentation with the plan provider by Friday 5th April although our advice would be not to leave it until the last minute.
Photo credit: Flickr/Danielle Zani
