Use it or lose it: your tax allowance checklist

Use this checklist and make the most of your allowances with the money you have now. It's all in here – read on.

Written by Frances Bruce

Published on 30 Jan 20232 minute read

This checklist can help investors get every last drop of value from allowances and get organised for the new tax year.

Remember, with investment your capital is at risk. Tax rates depend on individual circumstances and may change. ISA rules may also change.

Pay into an ISA

This year’s ISA allowance is £20,000

A hardworking ISA is the hero your money needs this tax year (your pension is another). You can invest without being impacted by the slashed capital gains and dividend allowances that came into effect this tax year.

Put money in a Junior ISA

This year’s Junior ISA allowance is £9,000

You can open a Junior ISA for a child under the age of 18 if you’re the parent or guardian and then anyone can contribute. They work in exactly the same way as adult ISAs, except for the allowance.

Contribute to a SIPP or other pension

This year’s pension allowance is up to £60,000

Can you afford to pay more into your pension so you can benefit from tax relief? Every contribution counts no matter how small – don’t forget the magic of compounding!

Check if you can take advantage of pension carry forward

If you’ve used up your pension allowance for this tax year you may be able to carry forward any unused pension allowances from the previous three tax years.

Chip in to pensions for others

This year’s Junior SIPP or other child pension allowance is £3,600

Another way to make sure your money is squirrelled away tax-efficiently is to pay into a Junior SIPP or other child pension. Or you may be able to contribute to your partner’s pension.

Reduce a future inheritance tax bill and give someone a helping hand

If you can afford to give money away you can use these allowances to avoid triggering inheritance tax or other tax charges:

£250 small gift allowance – you can give as many as you like
£3,000 tax-free gift allowance – you can give up to £3,000 in financial gifts every year. Your tax-free gift allowance can be split or given to one lucky recipient. You can carry your tax-free allowance forward for one year. This means you can give away £6,000 if you add both years’ allowances together
The wedding gift rule – parents can give £5,000 to a child, while grandparents can gift £2,5000 to a grandchild to help cover wedding expenses

Check investments held outside your ISA and pension

Remember, if you hold investments outside an ISA or pension in a taxable account you can sell your existing investments and use the money to top up and make the most of your ISA and pension’s excellent tax-efficient features:

Keep a tally of your contributions and make sure they don’t exceed your allowances.