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Get deadline ready:

TAX YEAR END 2020/21

Everything you need to know in the run up to the end of the tax year on 5 April; from ISA allowances to the Lifetime Allowance and how to book a callback by 10 March to guarantee advice by the deadline.

Important - The information shown is not personal advice. A pension is meant for your retirement, so you can’t normally access your money until you’re 55 (57 from 2028). Tax rules can change and benefits depend on personal circumstances. If you are unsure of the suitability of an investment for your circumstances please contact us for personal advice.

With the 2020/21 tax year ending on 5 April, it’s time to get your finances in order and make the most of government tax breaks and reliefs.

From maximising your ISA allowances, to contributing to your pension, we’ve gathered some helpful tools and resources to help you get prepared for the end of the tax year. To find out more about advice and our charges, click here.

Get started today

Not feeling confident about the end of the tax year? Book a callback by 10 March to guarantee advice before the end of the tax year.

Find out more

Your tax year end checklist

  • Maximise your ISA allowances
  • Review your Pension contributions
  • Get IHT ready

Are you ready for the end of the Tax Year?

If you find it difficult to know where to start when it comes to preparing for the end of the tax year, you’re not alone. Take the fun (and your money) away from the tax man with this guide to maximising your allowances.

ISAs

Act on one of the most efficient ways of sheltering your investments from UK income and capital gains tax with a £20,000 ISA allowance for 2020/21 tax year. Make use of your IHT gifting allowances by opening a JISA for a child. Explore long term savings goals and simplify your tax return.

Find out more

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Pensions

Benefit from tax relief on personal pension contributions up to a certain limit and potentially make use of any carry forward you may have available.

Find out more

Find out more

Inheritance Tax (IHT)

Take advantage of gifting exemptions to help reduce any potential inheritance tax liability. From nil rate bands, to the tax man receiving about £5.2bn of IHT in 2019/2020, we help you to look at how you can reduce your IHT risk.

Find out more

Find out more

ISAs

Make a start when it comes to sheltering money from UK income and capital gains tax with an ISA.

£20,000 allowance

Make your money work harder for you by considering making use of the £20,000 ISA allowance for the 2020/21 tax year, with no UK income or capital gains tax to pay on investments held within ISAs. Add money up to your allowance by the 5 April deadline.

Make the most of your allowance

Even if you’re worried about choosing the right investments for your goals, you can still make use of your allowance. If you’re interested in investing but you’re not sure which investments are right for you, you can open a Stocks and Shares ISA with cash and choose your investments later. But keep in mind the value of your investments can fall as well as rise so you could get back less than you put in.

TOP TIP: If you’re not sure about how ISAs fit into your financial goals, the right investments for you or even how you should prioritise your contributions, you should speak to an adviser.

Remember: Use it or lose it. There is no carry forward for ISA allowances.

ISA and tax rules can change and benefits depend on your personal circumstances.

Maximise tax shelters for the whole family

Kill two birds with one stone by investing into your children’s futures as well as utilising gifting allowances. You can contribute up to £9,000 this tax year into a Junior ISA. Find out more about JISAs here.

If you’re not sure about ISA allowances, you can speak to one of our advisers.

Ask an adviser:

  • How you should invest your ISA?
  • About the benefits of using your ISA allowance

Book a callback

Pensions

Last chance to get advice on tax relief on pension contributions for tax year 2020/21.

20% tax relief

If you’re under 75 and live in the UK you can get basic-rate tax relief (20%) on your pension contributions – limits apply. But those who pay tax at higher rates could claim back up to a further 25% via their tax return (rates for Scottish residents differ), although you must pay sufficient tax at the higher rates to claim full relief at those rates. Pension and tax rules can change and benefits depend on individual circumstances.

TOP TIP: The amount of tax relief you could receive is usually in line with the highest rate of income tax you pay.

£3,600 contribution

Even UK residents under 75 with no earnings can pay up to £3,600 (including tax relief) into a pension. HL Adviser Brad Clark says; “If you are not working and under age 75, you can still contribute £2,880 into a pension and receive £720 tax relief. This turns your £2,880 contribution into a £3,600 contribution”.

Annual allowance

The maximum amount which can be added to your pension this tax year is £40,000 for most people. This is called the Annual Allowance. Be aware contributions made by both you and your employer count towards this limit. If you’re a higher earner or have flexibly accessed a pension, your annual allowance may be lower.

Remember: You may be able to carry forward any unused allowance from the previous 3 tax years. You can normally only access your pension from the age of 55 (57 in 2028).

Lifetime allowance

It pays to remember that the maximum amount you can build up across all of your pensions over your lifetime before incurring a tax charge is £1,073,100 for the 2020/21 tax year. If you think you’re close to or are predicted to be close to the Lifetime Allowance an adviser can help you navigate your next steps.

If you’re unsure about your pension contributions due to your personal circumstances you can speak to one of our advisers.

Ask an adviser:

  • Should I sacrifice my bonus into my pension?
  • I’m not working, should I still contribute to my pension?

Book a callback

IHT

Allow the taxman to get over £5.2bn in IHT, or keep your own money within your family?

40% of estate value

Under normal circumstances, IHT is paid at 40% on the value of your estate (this includes all of your assets such as property, money and possessions) over £325,000. This threshold is known as the nil rate band. There is also an additional allowance if you pass on your main residence to direct descendants upon death. This is called the residence nil rate band and has a threshold of £175,000, depending on the value of the property. Although this allowance reduces on a sliding scale for estates worth over £2m. Married couples and civil partners may be able to inherit any unused element of their spouse’s nil rate bands after their death.

Tax rules can change and benefits depend on your personal circumstances.

Gift £3,000

Spending (such as holidays) and gifting your money can be tax efficient ways of reducing your IHT liability as they help remove this money from your estate. You can gift up to £3,000 each year, tax free, to anybody. You can also make small gifts up to the amount of £250 to anyone provided you haven’t already made any other gifts to the same person during the same tax year.

Carrying forward

You can also carry forward any unused allowance from the previous year. Your allowance could increase from £3,000 to £6,000. If your partner also has any unused allowance from the previous tax year, you can combine them, to give you a gifting allowance of up to £12,000 together.

This is even more helpful for larger gifts such as weddings where your gifting amount can be combined. This would mean you could give up to £10,000 for children between you, up to £5,000 for grandchildren and up to £2,000 for anyone else. However, you can’t carry any allowance forward for these gifts, so the clock resets once we cross into the new tax year.

Remember: Make sure your Will is up to date. It’s recommended that you update your Will every 5 years or after a major life event.

IHT can be complex. If you feel as though you need more support with planning on passing down wealth you could speak to one of our advisers. For more complex tax calculations, we recommend you speak to an accountant. They can help you to determine the right course of action for your personal circumstances.

Ask an adviser:

  • What is the best way to prepare for IHT?
  • Will my ISA be free from IHT?

Book a callback

Book a call with our advisory helpdesk

Don't leave it until it's too late

Book a callback today

Book a call with our helpdesk and secure your appointment with an adviser by 10 March to guarantee advice by 5 April tax year end deadline.

How it works

It starts with a callback from our helpdesk. They’ll chat to you about your current circumstances and goals and help you to decide if:

  • Advice is right for you
  • The benefits you might see from taking advice
  • Which of our advisory services might suit you
  • Our charging structure

Book a callback today

Book a call with our helpdesk and secure your appointment with an adviser by 10 March to guarantee advice by 5 April tax year end deadline.

How it works

It starts with a callback from our helpdesk. They’ll chat to you about your current circumstances and goals and help you to decide if:

  • Advice is right for you
  • The benefits you might see from taking advice
  • Which of our advisory services might suit you
  • Our charging structure