Every spring we have the same conversation several times over. Someone has had a good year, wants to know what can still be done about it, and discovers that most of the useful answers needed to have been decided months earlier.
These four are the ones families most often leave unused. None of them is exotic. All of them expire.
The ISA allowance
£20,000 per adult, per tax year, and it does not roll forward. A couple who use both allowances every year for a decade have sheltered £400,000 of contributions from any further tax on growth or income.
The common mistake is treating the ISA as a savings account rather than an investment wrapper. Cash held inside an ISA earns the same real return as cash held anywhere else — the shelter only matters when there is something to shelter.
The pension annual allowance
Up to £60,000 including tax relief and employer contributions, with the ability to carry forward unused allowance from the previous three tax years. For a higher-rate taxpayer the relief is substantial, and for anyone whose income crosses £100,000 it can be worth considerably more than the headline rate suggests.
Carry-forward is the one that gets missed. It is also the one with the shortest memory — every April, a year’s worth of it disappears.
The capital gains exemption
Modest now, but it applies per person and per year. Two things follow from that: gains are worth realising deliberately rather than accidentally, and assets held in one spouse’s name can often be rearranged before a disposal rather than after it.
The gifting allowances
- £3,000 a year in total, which can be carried forward one year only.
- £250 per recipient to any number of people, provided they have not received part of the £3,000.
- Regular gifts out of surplus income, which are immediately outside the estate if genuinely surplus and genuinely regular — this is the most valuable and the least used.
The last of those requires records. We ask clients to keep a simple annual note of income, expenditure, and the gifts made from the difference. It takes twenty minutes a year and it is the difference between a claim that succeeds and one that is argued over.
What we actually do about it
We review all four in the autumn rather than in March, when there is still time to act on the answer. If you have not looked at yours this year, it is worth an hour.
An invitation
Would it help to talk this through?
An hour, at our cost, applied to your own numbers rather than an illustration.
Request an audience