Ask Money: where do I stand on paying savings into a pension?

October 2, 2019

I retired a few years ago and immediately started drawing a defined benefit pension. My only forms of income now are the pension, company dividends and savings interest. When I came to fill out my tax return using the HMRC website, I wondered if it might be advantageous to invest my savings into a new pension. 

Playing with the tax return form, it showed I could reduce my tax liability. However, it seems you can only use “relevant earnings” to be able to get tax relief. Pension payments, dividends and savings are not relevant earnings. I’m not getting any other monies.

Ask Money: where do I pay tax on dividends?

September 12, 2019

I am resident in Scotland, so I’m subject to Scottish tax rates. I have a state pension, an armed forces pension and dividend income. Can you please advise me whether, as a taxpayer in Scotland, I must pay Scottish rates on my total income or – as a friend suggested – Scottish rates on my pension income and English rates on my dividends?
Garry Barnett, by email

What will Boris Johnson do for your money?

If painful experience has taught us to take politicians’ pre-election promises with a pinch of salt, what do we make of the pledges made by party leadership candidates, which aren’t even recorded for posterity in a manifesto we can scrutinise later on? Bear that thought in mind this autumn as you ponder what impact prime minister Boris Johnson might have on your finances.

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Ask Money: what’s the tax position on this gift?

June 24, 2019

I plan to gift £200,000 to my 50-year-old daughter, who has learning difficulties and no income. I propose to invest it for her in the City of London investment trust through a Halifax trading account at a platform fee cost of £12.50 a year. The dividends should generate about £8,000 a year for her bank account, which would cover the cost of a leasehold studio flat and living expenses. My wife and I are 74 and own other assets that will attract inheritance tax. Will the £200,000 gift be a potentially exempt transfer? Or will our daughter have to pay tax on the gift?

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.