New tax year 2019/2020: Tax and personal allowance changes

As the new tax year rolls around, here are the major changes that may hit your pocket from April 6 for the 2019-2020 tax year. 

Income taxes

The personal allowance, or the amount you can earn tax-free before you start paying income tax, will rise by £650 to £12,500. Pensioners won’t receive a higher personal allowance than other age groups.

You will pay basic rate tax (20%) on your taxable income between £12,500 to £50,000. This means you can earn up to £50,000 before you start paying higher rate tax (40 per cent).

This cunning tax-year-end plan could help retirees save 20% tax

Up to 75,000 pensioners with annual incomes approaching £50,000 could save 20% tax by delaying their final pension payout of the tax year until after 6 April.

The higher rate income tax threshold is due to rise from £46,350 to £50,000 on 6 April, which means that those with incomes within this range will be paying 20% rather than a marginal rate of 40% tax from next tax year.

What to review before and after April 2019 tax deadline

The end of the tax year is in sight, so now is a great time to have a good look at your finances and make sure you are making the most of this year’s savings allowances and maximising your saving potential.

In light of this, below is a list of top saving allowances to utilise before the tax year end, as well as those to take advantage of in the new tax year.

Trim your tax bill: 10 tactics

With the new tax year starting on 6 April, there’s still time to ensure your finances are as tax-efficient as possible. And while some allowances can be carried forwarded, with many it really is a case of use it or lose it.

Make the most of pension tax relief before it is too late

Anyone over 40 is now entitled to a free NHS mind and body health check every five years, at which they might expect to receive the cheerful advice – “use it or lose it”. A wealth adviser or manager looking to keep your finances in top condition might declare the same of your pension.

Ask Money: what are the tax rules for my overseas family?

November 24, 2018

I have a fairly substantial Sipp that I do not need to access for the foreseeable future, and I therefore plan to use it for inheritance planning purposes. I am 68, and I understand that if I die before the age of 75, the entire Sipp can be given to my nominated beneficiaries free of tax. 

How to minimise tax at retirement

People could end up paying 200 times more tax, depending on how they decide to access their retirement income, according to research by the Pension Policy Institute (PPI).

The findings were based on the tax that someone would pay if they fully withdrew their defined contrition (DC) pension, compared with annuity purchase.

ETF investors: don’t get caught out by the wrong domicile

The taxation of investments is a complex matter, but this shouldn’t stop investors from carrying out basic due diligence during the exchange traded fund (ETF) selection process to avoid unwelcome effects on returns.

UK investors have access to a wide array of ETFs listed on the London Stock Exchange. But being listed on the local UK exchange is no guarantee of tax efficiency. Some of these ETFs are listed in London just because it is the trading venue of choice for many international investors, so these ETFs may have been initially designed to suit the needs of non-UK investors.