In this week's Financial Matters, Fairhurst Accountants discuss how you can make the most of your money
Times remain tight and so here Fairhurst Accountants give a few handy tips on how to make the most of whatever money you have got
There are numerous ways to use certain tax reliefs to your advantage and in this article we focus on savings and investment.
Make the best use of tax-free savings and dividend allowances
For 2026/27, savings income of up to £1,000 is tax exempt for basic rate taxpayers, with a £500 exemption for higher rate taxpayers.
The tax-free dividend allowance of £500 is available to all taxpayers.
Married couples and civil partners can save tax by ensuring that each person has enough of the right type of income to make use of these tax-free allowances.
Contribute up to £9,000 to your child’s Junior ISA
The fund builds up free of tax on investment income and capital gains until your child reaches 18, when the funds can be either withdrawn or rolled over into an adult ISA.
Relatives and friends can also contribute to your child’s Junior ISA, as long as the £9,000 limit for 2026/27 is not breached.
Take advantage of the individual savings account (ISA) investment limit and generate tax-free income and capital gains
The maximum amount that can be invested in ISAs is £20,000 for 2026/27.
You can put the whole amount into a cash ISA, a stocks and shares ISA, an Innovative Finance ISA, or any combination of the three as desired. It is possible to open more than one of each type of ISA each tax year.
Transferring funds into an ISA early in the tax year will maximise the amount of tax-free income arising in the year.
ISAs can offer long-term tax advantages as an alternative, or addition, to pension savings.
Be warned though that the maximum annual cash ISA investment will be reduced to £12,000 from April 6 2027 for people aged under 65.
Other things to consider are:
- Plan the timing of your asset disposals to make the best use of capital losses and the capital gains tax (CGT) exempt amount;
- Consider if the Seed Enterprise Investment Scheme (SEIS), Enterprise Investment Scheme (EIS) or Venture Capital Trust (VCT) schemes fit with your investment profile.
If you need help navigating the complexity of tax rules and would like to create more efficient tax plans please contact your accountant. For investment advice, contact your financial advisor.