Mar 24 • 🏦 Retirement & Tax Accounts
The UK tax year ends April 5th. Here is what halal investors should do before then.
If you are a UK-based investor, this is a genuine deadline that affects your money.
The UK tax year runs from April 6th to April 5th. Your ISA allowance resets on April 6th. If you do not use your 20,000 GBP Stocks and Shares ISA allowance by April 5th, it is gone forever. It does not carry over.
Here is what to do in the next 12 days.
IF YOU HAVE NOT OPENED AN ISA YET
Do it this week. Not after the deadline. This week.
Trading 212: free Stocks and Shares ISA, no minimum deposit, HIWS and MWIM available. Takes about 10 minutes to open.
InvestEngine: also free, excellent for ETF-only portfolios, HIWS available.
AJ Bell or Hargreaves Lansdown: more established, slightly higher fees, broader selection.
Once the account is open, deposit whatever you can. Even 100 GBP uses part of your allowance. The account is open and you can add more later in the new tax year.
IF YOU ALREADY HAVE AN ISA
Check how much allowance you have left. Log into your provider and look at your ISA subscription for this tax year. The maximum is 20,000 GBP.
If you have cash available that you will not need for 5 plus years, consider topping up before April 5th. Every pound invested inside the ISA grows completely tax free. No capital gains tax. No dividend tax. That is a permanent advantage you do not get in a general investment account.
THE DEPOSIT TRICK THAT SAVES YOUR ALLOWANCE
You can deposit cash into the ISA now and invest it later. The allowance is used when you deposit the money, not when you buy the ETF. So if you are undecided about which fund to buy, deposit the cash first. You can hold it as cash inside the ISA and invest when you are ready.
This matters because the allowance expires on April 5th but the investment decision does not need to happen by then.
WHAT ABOUT YOUR SIPP?
Your SIPP (Self Invested Personal Pension) has a separate annual allowance. The cap for pension contributions is 60,000 GBP or 100 percent of your earnings, whichever is lower. This also resets with the tax year.
Every 800 GBP you put into a SIPP becomes 1,000 GBP through basic rate tax relief. Higher rate taxpayers can claim even more through self assessment. That is a guaranteed return before you even invest the money.
Have you used your ISA allowance this year? Planning to open one before the deadline? Drop it below.
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The UK tax year ends April 5th. Here is what halal investors should do before then.
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