The value of annual allowances

Each tax year individuals in the UK are entitled to generate tax free:

  • Income
  • Savings interest
  • Dividends
  • and Capital Gains.

For the 2019/20 tax year these annual allowances could be up to £32,500 for one individual or £65,000 for a couple. That’s £5,417 per month of tax-free spendable cash.

Using your allowances can reduce the income you need to earn to receive the same net cash

Using your allowances can reduce the income you need to earn to receive the same net cash

A - Couple generating pension and investment income using all the nil rate allowances
B - Single person's gross pension income to have the same net income

The chart shows how much gross taxable income an individual would need to take from a pension account to generate the same after-tax income that a couple could generate assuming they could arrange their investments to take full advantage of all the nil rate allowances available to them in the tax year 2019/20.

Important Notes
Tax issues will depend on everyone’s individual circumstances. Future tax rates, allowances, tax types and the tax treatment of savings and pension accounts will be subject to change. Tax planning needs to be a regular ongoing process.
Non UK resident tax payers will need to get advice on the taxes payable in their country of residence.

Next: Further tax efficient income →

Tideway Investment Group comprises the following entities: Tideway Investment Partners LLP; Tideway Wealth Management Limited and Tideway Asset Management Limited. Tideway Asset Management Limited and Tideway Wealth Management Limited are appointed representatives of Tideway Investment Partners LLP, which is authorised and regulated by the Financial Conduct Authority. FCA number: 496214.

Tideway Wealth Management Ltd
107 Leadenhall Street
London EC3A 4AF

+44 (0)20 3143 6100

© Tideway Investment Group 2019