We\u2019re heading into the second month of Budget speculation, and it\u2019s easy to let it get to you. <\/p>\n
So far, it\u2019s all just a whirlwind of rumours, but when you read so much about so many tax threats for so long, it can be tempting to feel you should do something \u2013 just in case. <\/p>\n
The risk is that you feel under pressure to take steps you wouldn\u2019t otherwise consider \u2013 because you\u2019re stressed about a potential tax hike or rule change. <\/p>\n
Alternatively, you might be torn in so many directions that you end up not doing the things that make the most sense for your finances.<\/p>\n
Fortunately, you don\u2019t need to be tempted into making mistakes, because there are some sensible steps you can take to help manage your tax bill that you\u2019ll be pleased with \u2013 regardless of whether they make it to the Budget announcement or not.<\/p>\n
This article isn\u2019t personal advice. If you\u2019re not sure if an action is right for you, ask for financial advice<\/a>. ISA, pension, and tax rules can change, and benefits depend on your circumstances. Tax rates and bands are different for Scottish taxpayers.<\/p>\n Before the Budget arrives<\/p>\n Some things need to be thought about more before taking action, like taking tax free cash from your pension.<\/p>\n But there are things you can do, that if you\u2019re in a position to do so, shouldn\u2019t leave you with any regrets.<\/p>\n 1<\/p>\n Use your capital gains tax allowance <\/p>\n With rumours suggesting possible tweaks to capital gains tax (CGT), you can take steps to manage any future tax bills, by moving any existing assets outside an ISA or pension into a tax wrapper. <\/p>\n You could use Share Exchange<\/a> to sell your shares in an HL Fund and Share account<\/a> and move the cash into a Self-Invested Personal Pension (SIPP), or Stocks and Shares ISA<\/a>, and buy back the same shares again \u2013 all in one instruction.<\/p>\n Remember, your \u00a33,000 CGT allowance might mean you have some tax to pay but once that money is in your SIPP or ISA, it can grow free from UK income and capital gains tax.<\/p>\n You could get an extra boost by moving money into a pension thanks to tax relief.<\/p>\n How much you can pay in and the tax relief you get depends on your circumstances. Remember though, you can’t usually access money in a pension until 55 (57 from 2028).<\/p>\n Before using Share Exchange take any charges for the deal and the new account charges into consideration. And remember you have to stick to your overall ISA and pension allowances.<\/p>\n Don\u2019t miss out on the 2025 Autumn Budget<\/p>\n Sign up to our weekly Editor’s Choice email to make sure you don’t miss out on the key changes from the Autumn Budget. <\/p>\n If you\u2019re starting out on your investment journey, it makes sense for a Stocks and Shares ISA<\/a> to be your first port of call. It can protect you from both capital gains tax and income tax.<\/p>\n With an allowance of \u00a320,000 to use this tax year, if you have the money available, and were planning to invest this tax year anyway, it\u2019s worth doing it before any potential new changes. <\/p>\n Remember, all investments and any income from them can rise and fall in value so you could get back less than invested.<\/p>\n If you need the money within five years, a Cash ISA<\/a> might be better suited. It will still protect you from any UK income tax on any savings interest.<\/p>\n 3<\/p>\n Make a pension contribution <\/p>\n The government has the option to extend the current freeze in income tax thresholds \u2013 which are already set to last until 2028. <\/p>\n Pension contributions can protect income from tax attacks, because you get tax relief<\/a> at your highest marginal rate. It means higher earners should take as much advantage as makes sense for their finances. A \u00a360,000 contribution could cost just \u00a336,000 for a higher-rate taxpayer and \u00a333,000 for someone paying additional rate.<\/p>\n