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The Value of Options in Tax Year End Planning

Gresham Wealth

With the tax year end fast approaching, we are working with a number of clients to look at their available allowances and the ways in which we can utilise these most effectively.

For the majority of people in the straightforward scenario of wanting to utilise their full ISA allowance of £20,000 and their maximum annual pension contribution (up to £40,000, dependent on income), we are working to get their contributions made and invested before the 5th April.

We also have a number of other clients in more nuanced situations where making the most of available allowances is a more complex picture. This is especially the case this year, where business owners or those with bonus-linked renumeration packages may not have received their expected level of income.

With the added benefit of having options available to them, accumulated through years of financial planning, and access to ongoing financial planning advice, there are a number of ways in which we are able to assist clients in maximising their allowances whilst reducing tax liabilities, both now and into the future.

Here is just one example of the ways in which we have been able to assist a client to utilise their full allowances to create for tax efficiency going forward.

Client Example

Client A had not received their usual renumeration this year and so had £6,000 of unused personal allowance remaining (currently £12,500 for the 2020/2021 tax year).  In addition, they had not utilised their ISA allowance for the year (currently £20,000 for the 2020/2021 tax year).

Because these allowances are lost if they are not used, it makes good financial sense to use them wherever possible.

The client was able to crystalise £56,000 of their pension and take a tax-free cash withdrawal £14,000 in addition to an income withdrawal of £6,000, in order to make full use of this year’s ISA allowance. Remaining income will be deferred to a time when the client actually needs it but they can control what level of tax is paid on that part and when.

The flexibility of the platform provider meant that no capital actually left the platform.  Utilising the client’s personal allowance in full means they were able to tax efficiently extract capital from their pension, and contribute fully to their ISA.  By seizing this opportunity, the client has increased the flexibility of future planning, which could enhance the longevity of their capital.

It’s not always easy to explain the long-term value financial advice brings, but the above example goes some way to demonstrate it.

To use the words of a client:

“I hadn’t considered other option you describe. That’s really useful in terms of flexibility and my understanding!

“It’s quite pleasing to have got to the point where I can really start to see the flexibility available to me that we discussed all those years ago when looking at the initial transfer.”

– H. S., Salford


To speak to use about your options approaching tax year end, or about working with us to create a long-term financial plan, please get in touch.


The Financial Conduct Authority does not regulate tax advice.

The value of investments can fall as well as rise. You may not get back what you invest.

I am only in this position because of you. One of the best decisions I have ever taken going with GWM.

With great thanks for all your reassuring attention over the last year. It means more to me than I can express in a few words.

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We are both very grateful for the time you spent with us in explaining various options. We certainly feel we now both have a much better understanding of our situation & the decisions which we need to consider moving forward.

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