Wednesday, July 26th, 2023
Copia Wealth & Tax is committed to keeping our clients well-informed about essential deadlines and providing timely reminders on key financial matters. In this article, we highlight some extended deadlines for Help to Save and NI contribution top-ups, along with a crucial reminder about additional inheritance tax relief for homeowners.
The HMRC has officially extended the ‘Help to Save’ scheme by 18 months, now lasting until April 2025. This scheme aims to assist individuals with low incomes in boosting their savings. Eligible users can save between £1 and £50 per month and receive a 50% government bonus at the end of the second and fourth years. The bonus is directly paid into the account holder’s chosen bank account, calculated based on the amount saved.
By participating, account holders on low incomes can receive a maximum bonus of up to £1,200 on savings of £2,400 over a 4-year period from the date the account is opened. Most individuals receiving Working Tax Credits or Universal Credit will be eligible.
Ensuring you maximise your State Pension entitlement is crucial. As of 6 April 2023, the full rate of the new State Pension increased to £203.85 per week (£10,600 pa), representing a 10.1% increase from the previous year.
To qualify for a State Pension, you need at least ten qualifying years, with full State Pension entitlement achieved after 35 qualifying years. To secure your full State Pension, check your contribution record through your Government Gateway account. You may be entitled to credit for missing years, such as during maternity leave or while caring for someone. If needed, consider making NI contributions for missing years.
An extended deadline now allows taxpayers to make voluntary NI contributions for missing years dating back to April 2006, with the deadline extended to 5 April 2025.
The Inheritance Tax residence nil-rate band (RNRB) provides a transferable allowance to married couples and civil partners when passing down their main residence to children or grandchildren.
On 6 April 2020, the RNRB allowance increased to a maximum of £175,000, with any unused portion transferable to a surviving spouse or partner. Keep in mind that the RNRB is in addition to the standard £325,000 Inheritance Tax (IHT) nil-rate band.
Together, these allowances allow couples to pass on property worth up to £1 million to their descendants without incurring IHT.
Ensure you claim the transfer of the unused RNRB from HMRC when the second spouse or civil partner passes away. Note that there is a tapering of the RNRB for estates worth over £2 million, resulting in RNRB reducing by £1 for every £2 the estate exceeds £2 million.
Please be aware that HMRC’s Self-Assessment telephone helpline will be closed from 12 June 2023 to 4 September 2023 due to reduced call volume during summer months.
This closure aims to redirect queries to HMRC’s digital services, which include online guidance, a digital assistant, and webchat.
While this trial closure might cause some disruption, rest assured that our friendly team at Copia Wealth & Tax is here to assist you with any Self-Assessment queries during this period.
At Copia Wealth & Tax, we prioritise your financial well-being.
If you have any questions or require further assistance with the topics discussed in this article, don’t hesitate to book an appointment with one of our experts. You can reach us at 01902 783172 or click HERE to email us via the form on our website. We look forward to helping you maximise your financial position for yourself and your descendants.