Simoney Kyriakou is an award winning finance journalist who has been writing on personal finance since the late 1990s.

March has always been ‘decision time’ for savers wanting to make the most of various tax-efficient investment vehicles.

But tax-savvy investing can happen any time of the year – especially if you are considering a more complicated investment that will require proper due diligence and sound financial advice.

Below are some ways to maximise your personal allowance, use Isas and manage your capital gains allowance wisely as part of your personal planning.

Personal allowance

Making the most of your personal allowance is an important part of tax planning.

A personal allowance is how much you can earn each year – currently set at £12,500 – before income tax kicks in.

Perhaps you are living off a pension and don’t want to pay more tax than necessary. Consider whether you need more than £12,500 a year. If you can use other savings or reduce your expenditure, then taking out less than your allowance each year can help reduce your tax bill.


Isas come in various forms. Any growth (capital gains) or income rolled up inside an Isa environment remains tax-free until you take the money out.

Cash/Stocks and Shares: You can invest up to £20,000 a year in an Isa. Cash Isas carry a set interest rate for a specified period. You need to check the provider to make sure there are no restrictions on adding money or accessing it. Stocks and Shares Isas can benefit from long-term market growth but you also bear the risk. You may also need to pay

the manager/broker dealing or management fees.

Lifetime Isa: If you are under 40 and want to save for a first home or your retirement, a Lisa is a good start. For every £4 you save, the government will boost it by £1 each tax year. The upper limit is £4,000pa with a government bonus of £1,000. You MUST either use it for a first home or for your pension at age 60. Any other withdrawals come with severe penalties.

Junior Isa: Parents and guardians of children under 18 years old can take out a Junior Isa and pay in up to £9,000 a year. This becomes the child’s property at 18.

Help to Buy Isa: These are now closed to new applications, but if you have one, you can pay into it until November 2029 and claim the 25 per cent bonus until November 2030.

Innovative Finance Isa: Savers can put up to £20,000 a year into IFISAs, which invest in peer-to-peer loans through a platform. Returns can be high single-digit but are not guaranteed. Plus, several platforms have gone bust, so advice is essential.

Mitigating capital gains

The Office for Tax Simplification (yes, this exists) has recommended increasing capital gains tax (CGT) rates. You pay CGT when you sell assets that have gained in value since you bought them – for example, a second home or company shares. Not all assets qualify for CGT, and if your gains in one year are less than the personal allowance, you do not have to pay CGT. So sell wisely!

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