New Tax Year

Back to News & Views

Welcome to the new tax year and what a start it has been. Below is a breakdown of all the changes implemented in last months Budget. REMEMBER it is an ideal time with markets being low to invest, so do speak to us if you have cash available. Normally we would do tax planning throughout the year but with markets being low we want everyone to have the chance to strike whilst the iron is hot!

The value of investments and any income from them can go down as well as up and you may not get back the original amount invested.

The 2020/21 tax year started at the stroke of midnight between the 5th and 6th of April.  While many individuals leave tax planning to the end of the tax year, you can look to maximise the benefits by using your personal tax allowances* and reliefs straight away.  Please get in touch to take advantage of one or more of the following:

Income Tax

  • The tax-free personal allowance remains unchanged at £12,500.
  • Basic rate tax of 20% will be payable on income above the tax-free allowance and up to the higher rate threshold of £50,000.
  • Additional rate income tax remains the same at 45% on income above £150,000.
  • If you are married or in a civil partnership, you may be able to save money by structuring your finances as a couple to ensure you are using both spouse’s tax allowances. This could be an especially good idea if one spouse pays tax at a lower rate than the other.


  • The Junior ISA allowance has risen to £9,000 from £4,368 for children under 18.
  • The adult ISA allowance of £20,000 remains unchanged.


  • Saving into a pension comes with great tax benefits. For a start, investments in your pension are free from Income Tax and Capital Gains Tax.
  • Depending on your type of pension, your own pension contributions (on gross contributions up to the level of your earnings (or £3,600 if more)) will also receive an automatic 20% top-up from the taxman, and higher-rate and additional-rate taxpayers can claim back another 20% or 25% through their Self-Assessment return.
  • Because of these generous tax rules, there is a limit to the amount you and your employer combined can pay into your pension without suffering a tax charge on the contributions.  This is known as the annual allowance and is currently £40,000 for most people (although this tapers down to as little as £4,000 for higher earners).
  • If you have not used your annual allowance in the last three years, you may also be able to make extra contributions by using carry forward.
  • Minimum pension contributions (paid by employers and employees) through auto-enrolment remain 8% (at least 3% from the employer with the employee making up any balance) of band earnings. Some schemes operate on a different contribution basis.
  • The lower limit of the qualifying earnings band has increased from £6,136 to £6,240. This means that where contributions are based on qualifying earnings, the first £6,240 of an individual’s earnings does not count towards auto enrolment contributions.  The upper limit is £50,000.
  • The Lifetime Allowance for pension savings has increased to £1,073,100.
  • The new State Pension, for those reaching state pension age after 5 April 2016, has increased with the full level of weekly pension now £175.20. The full basic state pension for those who reached state pension age before 6 April 2016 has increased to £134.25 per week.

Other Savings Allowances

  • The Personal Savings Allowance, which gives you tax-free savings interest, remains £1,000 for basic rate taxpayers.  This reduces to £500 for higher rate taxpayers and additional rate taxpayers do not get any allowance.
  • The tax-free Dividend Allowance remains at £2,000 (although dividends received by pension funds and ISAs remain tax-free)  

Inheritance Tax

  • Each tax year you can make a range of tax-free gifts.  These leave your estate immediately and won’t be taken into account when calculating your Inheritance Tax bill.
  • All gifts to your husband, wife or civil partner (as long as the UK is their permanent home).
  • Gifts of up to £3,000 each tax year, which can be carried over one year for a total of £6,000.  This is useful if you did not use it in the 2019/20 tax year.
  • Unlimited individual gifts of up to £250 per person.  Although not to anyone who has already received any larger gift from you.
  • Wedding gifts of up to £5,000 for a child, £2,500 for a grandchild or great-grandchild, or £1,000 to anybody else.
  • Unlimited payments towards the living costs of a child under 18 or in full-time education, elderly dependant or ex-spouse.
  • Unlimited regular gifts from surplus income that won’t affect your standard of living.
  • Gifts not covered by one of these exemptions are outside of your estate after 7 years.
  • The Residence Nil Rate Band has risen to £175,000 from £150,000.
  • This can be added to the £325,000 Inheritance Tax allowance when a direct descendant inherits a home that as, at some point, been the deceased’s main residence (children or grandchildren, not siblings).

Capital Gains Tax

  • The Capital Gains Tax allowance has increased to £12,300 from £12,000.
  • Married couples and civil partners each have their own allowance and these can be combined where assets are owned jointly.

 Landlord Mortgages

  • Landlords are no longer able to offset their mortgage interest payments against their rental income.
  • There is now only a 20% tax credit saving from a landlord’s mortgage interest.

If any of these are of interest to you, please do not hesitate to contact your Wealth Manager directly.


* This information is based on our current understanding of the rules for the 2020-21 tax year.

HM Revenue and Customs’ practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.

The Financial Conduct Authority does not regulate tax advice or estate planning


Book your FREE, no obligation discussion today. Schedule Appointment

Sign Up to our mailing list - Receive regular news, tips and financial commentary from the Gemini Team.

Latest News

  • Many media outlets and pundits anticipated that the Chancellor’s Summer Economic Update would not contain major policy developments. Yet there was a range of announcements that will likely have important implications for the UK economy and household finances. [...]

  • The latest issue of our moneymatters magazine is now available to downlaoad. A return to how life was at the start of 2020 is some way off. Even now that lockdown restrictions are starting to be eased, coronavirus (COVID-19) will continue to affect our lives in many ways. [...]

  • With the recent uncertainty surrounding Coronavirus and oil prices, despite us being well into the tax year, many people are adopting a ‘wait and see’ approach before putting any more money into the market via their ISAs or pensions. [...]

  • While we may often neglect our health, many people are finding it at the forefront of their thoughts in the current climate. People across the world are taking measures to avoid the virus, both for their own wellbeing and to protect the vulnerable people around them. [...]

  • Most of us put off estate planning as we don’t want to deal with difficult decisions or tempt fate. But there is nothing like a global pandemic to remind us of our own mortality, and consider how our loved ones would cope if anything happened to us. [...]

  • At times like these, we look to potentially save on unwanted expenditure, BUT, beware of cancelling protection insurance policies [...]

  • 1 in 8 homebuyers don’t discuss their protection needs! Buying a property is usually the biggest financial obligation many of us will take on in our lifetime, and it’s an obvious moment to pause and consider our protection needs. [...]

  • While many clients understand the potential of an investment plan, or the tax-efficiency of a pension, estate planning is a less exciting prospect. No one wants to think about their own mortality, and taking steps to plan for death can seem like tempting fate. [...]

  • Whilst in isolation or lockdown, it is advisable to keep socially active. This means talking to people other than those in your household or who your work with. [...]

  • 3 months ago

    Alongside the changes we are all living by on a daily basis, for a number of us, it gives us the opportunity to do some of those things that we haven't 'got round to' [...]

  • Despite the current situation, it’s a good time to review your finances and get into better spending habits for the new financial year. With that in mind, lets consider some ways to save money that won’t impact too much on your lifestyle [...]

  • 3 months ago

    Welcome to the new tax year and what a start it has been. Below is a breakdown of all the changes implemented in last months Budget [...]

Gemini Wealth Management Ltd is Authorised and regulated by The Financial Conduct Authority Registered in England & Wales No. 5919877 Registered Office: Gemini House, 71 Park Road, Sutton Coldfield, West Midlands B73 6BT The Financial Conduct Authority does not regulate tax and trust advice, will writing and some forms of buy to let mortgages. The guidance and/or advice contained in this website is subject to regulatory regime and is therefore restricted to those based in the UK.

Website by Mellow Marsh Software
© Gemini Wealth Management Ltd
Privacy Notice | Cookie Policy