Making the most of your tax allowances

Gary Hughes

Special Projects Manager

With the end of the tax year approaching now is a good opportunity to undertake some tax “house-keeping” to ensure that no tax-saving opportunities are missed. Many of the tax allowances and exemptions available are lost if they are not used within the tax year, as they cannot be carried forward.

In the first of three blogs, we’re focusing on available allowances, including personal and savings allowances.

Personal Allowances:

Ensure you have fully utilised your personal allowance for the year of £12,500. In particular, the transferable marriage allowance between basic rate taxpaying spouses allows a non-taxpaying spouse to transfer up to £1,250 of their unused personal allowance to their spouse.

Where income exceeds £100,000 the personal allowance is gradually withdrawn by £1 for every £2 of income up to a maximum of £125,000, creating a 60% marginal tax rate in this band of income.

To avoid this punitive tax rate and losing your personal allowance consider:

  • Deferring income where possible
  • Making additional pension contributions (subject to overriding limits)
  • Making charitable donations qualifying for gift aid relief


  • Personal Savings Allowance:
    Basic rate taxpayers are entitled to receive £1,000 of tax-free savings income, and higher rate taxpayers £500. The allowance isn’t available to additional rate taxpayers.
  • Dividend Allowance:
    All taxpayers are entitled to a £2,000 dividend nil-rate allowance.
  • ISAs:

    Where possible you should make full use of your general annual ISA allowance of £20,000.

    Help-to-buy ISAs allow first time buyers get a 25% cash bonus from the Government on savings made into a Help-to-buy ISA to help fund a property purchase.

    Lifetime ISAs (LISAs) allow UK residents aged between 18-39 to contribute up to £4,000 per tax year (which counts towards the general ISA allowance of £20k). The Government will then add on a 25% bonus at the end of each tax year in respect of the contributions paid. There are strict conditions on what can be done with the money.

How Hallidays can help

By adopting some of the pre year end tax planning measures identified in our blogs you may be able to reduce your overall tax liability for the year. If you’d like further support with your tax planning please contact our specialist tax experts on 0161 476 8276, email or visit to learn more about how we can help.

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