The value of investments and any income from them can fall and you may get back less than you invested.

Five areas for action this tax year


On April 6, the 2019/20 tax year began, and with it came several significant changes to the UK’s tax system. To mark the occasion, here are five things to consider that can make your finances and investments more tax efficient as the new tax year gets underway. 

1. Your ISA allowance: don’t wait to use it

The Individual Savings Account (ISA) annual subscription limit remains at £20,000 in 2019/20, while the annual allowance for Junior ISAs and Child Trust Funds has been increased to £4,368 – and it could be more beneficial to make use of these allowances sooner rather than later.

Although the value of your portfolio can go up and down, utilising your ISA allowance earlier in the tax year means that your investments will have the chance to benefit from tax-free returns for longer.

2. Top up your pension: but watch out for the lifetime allowance

The annual allowance – the limit on the amount of pension contributions that can be made each year and qualify for tax relief – remains at £40,000 but note that this may be lower depending on your individual circumstances.

When considering how much you can save it is important to be aware that there is a limit on the size of overall pension savings you can accumulate without facing a hefty tax charge of up to 55% on the excess, known as the lifetime allowance. It is now £1,055,000.

3. Make use of new gift allowances

If you are looking to reduce your estate for inheritance tax purposes you can give away up to £3,000 worth of gifts (assets or cash) each tax year and they will be immediately excluded when the value of your estate is calculated. This is known as the annual exemption and applies to individuals, so a couple can make £6,000 worth of gifts. If you didn’t make use of this exemption last tax year, you can double up this tax year.

You can also give as many gifts of up to £250 per person as you want during a tax year, as long as you haven’t used another exemption on the same person. Any amount of surplus income can be gifted provided you can maintain your standard of living after making the gift.[1]

4. The personal allowance: how not to lose it

The personal allowance – the amount you can earn before paying income tax – rose to £12,500 on 6 April. The threshold for the start of the higher-rate 40% tax band also increased to £50,000[2].

However, higher earners start to lose their personal allowance when they earn over £100,000. The personal allowance is reduced by £1 for every £2 of income above £100,000. This means your allowance is zero if your income exceeds £125,000.

If you are caught by this rule, you may be able to claw back some or all of your personal allowance by trading off taxable earnings for certain benefits. Making additional pension contributions is one option. But whether this is appropriate will depend on your individual circumstances and we strongly recommend you seek advice from a tax professional

5. Don’t forget capital gains

One allowance many people forget is the ‘annual exempt amount’ for capital gains tax, which has increased to £12,000[3].

If you have a large portfolio of shares or collective investments held outside an ISA or other tax wrapper, it’s worth using as much of this allowance as possible each year – by selling assets that have risen in value – or you could be storing up a large exposure to capital gains tax for the future. It is worth remembering that the allowance is for individuals, so couples have a joint allowance for 2019/20 of £24,000.


The value of investments can fall and you may get back less than you invested.

No investment is suitable in all cases and if you have any doubts as to an investment’s suitability then you should contact us.

Please note that this document was prepared as a general guide only and does not constitute tax or legal advice. While we believe it to be correct at the time of writing, Brewin Dolphin is not a tax adviser and tax law is subject to frequent change. Tax treatment depends on your individual circumstances, therefore you should not rely on this information without seeking professional advice from a qualified tax adviser.



[1] Inheritance Tax.

[2] Annex A: rates and allowances. The £50,000 threshold only applies in England, Wales and Northern Ireland. In Scotland the 41% higher-rate band starts at £43,431. Source: Scottish Government: Scottish income tax: 2019-2020, 12 December 2018. 

[3] Annex A: rates and allowances.

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