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Making the basics brilliant – four key questions that advisers are asking their clients ahead of tax year end 

The clock is ticking on the 2017/18 tax year. Here are four questions which could serve as a useful framework for your tax-year end conversations with your clients.

1. Have you used up your ISA allowance?

This is a basic question, but a very important one. The vast majority of your clients will be well aware that ISAs exist but they may not know that the ISA tax allowance for 2017/18 is as high as £20,000 for each adult and £4,128 for each child. The approach of year end is a good opportunity to remind your clients that ISAs are a very tax-efficient way to save for the future and also gives them greater control of their own money than most pension products.

Useful tool for advisers: With our ISA data download tool you can quickly and easily download details of your clients’ current ISA subscription details and see what’s available to invest in the current tax year, assuming that they haven’t taken out ISAs with other providers.

2. Have you updated me on all of your capital gains?

Since people can sometimes associate capital gains tax (CGT) with property, it is worth reminding your clients that CGT is also due on the sale of shares, all or part of a business, and personal valuables worth £6,000 or more including antiques, jewellery and paintings. You could suggest that your clients contact you directly if they are in doubt about any disposals that they have made.

The CGT tax-free allowance (known as the annual exempt amount) is currently £11,300 per person, so if your client has already exceeded this amount, you may need to discuss whether any further gains can be deferred to the next tax year. You could also reiterate the difference in CGT rates in case your clients are not aware of it: residential property gains are taxed at 18% for basic-rate taxpayers and 28% for higher-rate taxpayers. Other gains are taxed at 10% and 20% respectively.

Useful tool for advisers: Our capital gains reporting tool makes complex CGT calculations simple, allowing you to help your client maximise their CGT allowance.

3. Have you used up your pension annual allowance?

Since pension rules could change at any time, it’s important to ensure that your clients who are highly paid or self-employed take advantage of the generous tax relief that currently exists on pension contributions.

Individuals can get tax relief on pension contributions of up to 100% of their earnings or a £40,000 annual allowance (whichever is lower). Not only does the relief allow high earners to save for retirement in a tax-efficient way, it is also a good option for self-employed people who want to invest cash that they have built up in their business without withdrawing it as taxable dividends. Furthermore, clients have the option to top up the pension of a non-taxpaying spouse or a civil partner by paying £3,600 and receive basic income tax relief at 20% on the contribution.

For your clients who have an adjusted income of more than £150,000 and are subject to a tapered annual allowance, it’s worth exploring whether carry forward could be used to make use of any unused allowances from the previous three years.

Useful tool for advisers: Our 2017/18 annual allowance (including taper) and maximum funding calculator allows you to calculate the maximum gross contribution that can be paid by 5 April 2018, using any available carry forward, without triggering an annual allowance charge.

4. Is your money invested in a way that reduces your tax bill on dividends?

Since April 2016 the notional 10% tax credit on dividends was abolished and replaced with a tax free dividend allowance. This tax year, clients benefit from a £5,000 tax-free allowance on income that they earn from dividends. In 2018/19, that allowance drops to £2,000.

So, talking to your clients about the dividends they earn from unwrapped investments and how those investments could be held in a more tax-efficient environment in future could be a valuable conversation. The options include:

  • Selling investments that they hold in unwrapped investments and then buying back within an ISA that could be held either by them or their spouse (what is known as ‘Bed and ISA’).
  • Reviewing their investment portfolio so that they invest in assets that produce smaller dividends, but higher capital growth.
  • Reregistering the assets in their spouse’s name (in-specie transfer).

Useful tools for advisers: Use our PROMPT online mail processing tool to initiate the Bed and ISA process on behalf of your clients – it’s entirely online and signature-free. Transfer of ownership can also be facilitated by reregistering assets in specie.


Although there are time pressures, by asking the right questions and using the right tools, tax year end is a brilliant opportunity for you to make a significant difference to your clients’ financial futures and to illustrate the value of your advice.

Download ‘In a Nutshell: Tax year end: Four ways to secure your future’, our straightforward guide for your clients.


The information provided in this article is not intended to offer advice.

It is based on Old Mutual Wealth or Quilter International's interpretation of the relevant law and is correct at the date shown on the title page. While we believe this interpretation to be correct, we cannot guarantee it. We cannot accept any responsibility for any action taken or refrained from being taken as a result of the information contained in this article.

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