UK residents must utilize tax allowances by April 5

Tax experts are warning UK residents to act quickly as the end of the tax year approaches. The deadline is April 5, 2025, and people have limited time to make the most of their financial allowances. For adults, the Individual Savings Account (ISA) allows a maximum investment of £20,000 in cash or assets. This money is exempt from income and capital gains tax. However, any unused allowance will vanish after the deadline. Parents can also open a Junior ISA (JISA) for their children, with an annual limit of £9,000. Similar tax benefits apply, including an exemption from inheritance tax, unless the account changes to an adult ISA. When it comes to pensions, individuals might want to take advantage of employer matching contributions. This effectively means extra money for retirement. A Self-Invested Personal Pension (SIPP) allows contributions of up to £60,000, and you can carry over unused amounts from the past three years. Parents can also consider Junior SIPPs for their children, where the government adds up to £720 for a maximum contribution of £2,880 annually. These funds remain available only when the child turns 55, benefiting from compound interest over time. Lastly, it's crucial for everyone to have some cash saved for emergencies. With interest rates dropping, experts suggest investing surplus funds to take advantage of market opportunities. Don't forget the capital gains tax-free allowance of £3,000 before the tax year ends. Additionally, consider inheritance tax strategies. Individuals can gift £3,000 a year to reduce their estate's value, plus smaller gifts of £250 to as many people as wished. Regular gifts from income may also help, but remember the seven-year rule for potentially exempt transfers.