So there we are – the big event of the financial year has come and gone. The new tax year is upon us. So as the celebrations fade, and the last of the party popper confetti falls to the ground (what do you mean you didn’t celebrate?), it’s time to look ahead to what fiscal fun the next twelve months have in store…

Since the new tax year began last week (on Saturday 6 April to be exact), a few changes have quietly come into force – including some potentially favourable changes to allowances. It’s worth checking which might apply to you, and if you could be saving some extra cash this year.

Income tax

The income tax thresholds have moved again and, fortunately, most of us will be better off as a result.

The tax-free personal allowance for 2019/20 has increased from £11,850 to £12,500 – saving the majority of earners up to £130 this year. And the higher-rate tax bracket has increased from £46,350 to £50,000 across England, Northern Ireland and Wales – saving higher-rate taxpayers a further £730 (£860 in total).

But don’t go spending your extra cash just yet. Earnings between £46,350 and £50,000 are now hit by the higher 12% national insurance contribution rate. This means any additional savings you might make from your income tax relief could be offset by the rise in NI contributions.

And it’s a double whammy for Scotland. As well as being affected by the 12% NI contribution rate, higher earners will not benefit from the same reduction in income tax as elsewhere in the UK — Scotland’s higher rate band remains unchanged at £43,430.

To put things into perspective, someone with an annual salary of £50,000 in Scotland will now pay £9,044 in income tax each year, compared to £7,500 for those with the same salary working elsewhere in the UK.

Inheritance tax

The same 40% inheritance tax will still apply to estates valued over the nil-rate band of £325,000. But there has been an increase in the residence nil-rate band – from £125,000 to £150,000.

This means you can pass on an extra £25,000 tax free — bringing the total allowance to £475,000 before you’re hit by inheritance tax, if part of your estate is the family home.

Spouses can make use of both allowances, meaning £950,000 can effectively be passed on by a couple, before incurring tax charges.

But inheritance tax can catch people out. Because if your total estate is valued at more than £2m, you’ll lose £1 of the ‘main residence’ allowance for every £2 over the threshold.

By speaking with a financial adviser, you can mitigate these surprise charges and put in place a comprehensive financial plan so you’re passing on as much of your savings as possible to those closest to you, and not HMRC.

Pensions

It’s good news all round on the pension front, with a 2.6% increase to both the basic and new state pensions.

If you’re on the basic state pension, your weekly payout has gone up by £3.25 to a total of £129.20, and for those on the new state pension, payments have increased by £4.25 to a total of £168.60 per week.

If you aren’t sure which state pension applies to you or you want to start claiming your benefit, you’ll find all the information on the GOV.uk website.

The lifetime allowance (the total amount you can amass, tax free, in your pension pot over your career) has also been given a boost – from £1.03m to £1.055m – while the maximum annual allowance of £40,000 for tax relief on contributions remains unchanged.

And for those still in work, your pension pot might look a little more attractive moving forward — auto-enrolment contributions to workplace pensions have increased from 5% to 8%, with a minimum of 3% of contributions coming from your employer.

ISAs

Individual Savings Accounts are a great way to make use of tax-wrappers as you can save up to £20,00 tax-free in a standard ISA account.

Although there have been no changes to the standard allowance for the 2019/20 tax year, if you’ve started to build a nest egg for your kids, the Junior ISA contribution allowance has increased slightly from £4,260 to £4,368.

Capital gains tax

As of 6 April, the capital gains tax allowance (tax on the profit you make from selling an asset) has increased from £11,700 to £12,000 for the new tax year.

Investors in particular should also take note. Previously, the holding period to qualify for Entrepeneur’s Relief (a CGT break granted to those who sell shares in an unlisted company, provided they own at least 5%) was 12 months. But you’re now looking at a 24 month wait in line with the new changes.

Remember, as with all tax matters, your individual allowances will depend on your personal circumstances. And, as this article goes to show, tax rules can change regularly!

But it doesn’t have to be a headache.

If you’re unsure how any of the recent legislation changes could affect your financial situation, it’s worth speaking to a financial planner who can help make sure you’re maximising all of your allowances while staying on the right side of the taxman.

Why not make focusing on your financial fitness your New (tax) Year’s resolution?