Every first quarter of the year, advisers get together with their clients to discuss their tax planning issues. The run-up to April is always the busiest time of year, and the earlier advisers can get the tax affairs of their clients in order, the better.
There are many issues to think about, and any initial tax planning should consider a client's basic allowances, ensuring that one has taken full advantage of the capital gains tax allowance.
Connected to making use of one's allowances is ensuring the use of the annual Isa allowance, which this year is £15,240. For active Isa investors, who choose to invest some or all of their allowance in a stocks and shares Isa, there are plenty of funds to choose from. The period of February and March, is usually associated with the Isa season and according to evidence from Isa brokerages, income funds are high on investors' lists, with Woodford Equity Income coming top of the list.
Advisers should be aware of the new Lifetime Isa being launched at the start of the new tax year, which allows people to save for a property deposit, with attached tax relief, as well as save for a pension. however, some have questioned whether this is really such a good idea, and over the long-term whether this is the best way to save for a pension.
Pensions are also subject to a certain degree of planning, and the end of the tax year is the time to make sure one is making the best use of the available allowances. The annual allowance for making pension contributions is £40,000 although from April next year, the government is introducing a tapered allowance, starting from £10,000.
For anyone in danger of going over their annual allowance, they are able to make use of the carry forward rules, if there is unused allowance from a previous year. However, if the pensioner in question has accessed their pension fund under pension freedoms, then the annual allowance is cut back to £10,000 and the carry forward rules do not apply.
All in all, tax planning is one of the most obvious ways an adviser makes him or herself useful to clients, so it is advantageous to make the best use of it.
Melanie Tringham is features editor of Financial Adviser