A new year marks new beginnings and a clean slate – so the start of the new tax year on April 6th 2022 is the perfect time to set some new personal and business goals.
We’re hardwired to live in the present, but we all need to picture our future if we’re going to get there smoothly. By taking time to understand what makes you tick (and what doesn’t!), the goals will come naturally. And early use of the fresh tax allowances and exemptions could bring rewards over the longer term, helping you achieve the future you want.
Here’s a rundown of what has and hasn’t changed for the 2022/23 tax year:
• Your ISA allowance stays at £20,000 – this can be in a Cash or Stocks & Shares ISA, or a combination of both. Similarly, the Junior ISA allowance stays at £9,000 per child.
• Your pension annual allowance remains at £40,000 or 100% of your earnings (whichever is lower). The lifetime allowance current limit of £1,073,100 will be frozen until 2026.
• The personal allowance (the amount that you can earn before you start paying Income Tax) will remain at £12,570. Meaning you can earn £50,270 before you start paying higher rate tax.
• The Inheritance Tax nil-rate band remains at £325,000 and will remain frozen until 2026. The residence nil-rate band stays at £175,000.
• The Capital Gains Tax annual exempt amount for individuals will remain at £12,300 until 2026.
• The main rate of Corporation Tax will remain at 19%. It’s set to rise to 25% from April 2023 for businesses with profits of £250,000 and over.
One key change to be aware of is that Dividend Tax has risen by 1.25% across the board. So, if you’re a business director, it’s worth thinking about how you might shield yourself from this rise – for example, by paying extra pension contributions.
Seizing new opportunities
Talking your goals over with an adviser is just the first step in helping you better understand tax reliefs and how they relate to your individual circumstances.
Everyone’s financial journey and situation is different, so creating a detailed financial plan to match your goals will make you feel confident and in control, meaning you can spring forward into the future – and embrace it!
If you’d like to talk through your own personal goals, or review your existing ones, please contact me today for a no-obligation chat.
The value of an investment with St. James’s Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than the amount invested.
The levels and bases of taxation, and reliefs from taxation, can change at any time and are generally dependent on individual circumstances.
Wellesley Wealth Advisory is an Appointed Representative of and represents only St. James’s Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority) for the purpose of advising solely on the Groups wealth management products and services, more details of which are set out on the Groups website www.sjp.co.uk/products. Wellesley Wealth Advisory is a trading name of Wellesley Investment Management Ltd.
Samantha Kaye, Chartered Financial Planner | Adviser
Wellesley House, 50 Victoria Road, Burgess Hill, West Sussex RH15 9LH