The start of the new tax year on 6 April 2025 presents a valuable opportunity for doctors to reassess their financial situation and take advantage of freshly reset tax reliefs and allowances. By acting early, you can optimise your tax efficiency, maximise investment opportunities, and ensure your financial health remains in peak condition.
Key tax allowances have reset
As of 6 April 2025, the following key tax reliefs and allowances have been refreshed:
- Pension annual allowance: The standard allowance is £60,000, covering the growth of your NHS Pension as well as any personal contributions to private pensions. If you have unused allowance from the previous three tax years, you may be able to carry it forward, allowing for additional pension contributions.
- ISA allowance: The tax-free savings limit remains at £20,000 per individual.
- Dividend allowance: The tax-free dividend allowance has reset, meaning you can receive up to £500 in dividends before tax applies.
- Capital gains tax (CGT) exemption: The CGT-free threshold remains at £3,000, allowing you to realise gains within this limit without incurring tax.
Why early-bird planning pays off
1. Maximise pension contributions
Doctors with fluctuating incomes, particularly those affected by annual allowance tapering, should review their pension contributions early to avoid unexpected tax charges. Making informed decisions now can help optimise your retirement savings while benefiting from tax relief.
2. Efficient investment planning
With your ISA allowance reset, now is the time to ensure your tax-efficient investments are aligned with your financial goals. Early planning allows you to benefit from compounding returns over the tax year.
3. Optimise your tax position
Strategic planning can help doctors manage their earnings, whether through salary, dividends, or other income streams. Those working as self-employed consultants or within private practice should particularly review their remuneration structure to remain tax-efficient.
4. Consider gifting and estate planning
The annual gift exemption of £3,000 has also reset, offering an opportunity to pass on wealth efficiently while reducing potential inheritance tax liabilities. Those who have not used the previous year’s allowance can carry this forward to the new tax year giving a total exemption of £6,000.
Take control of your finances today
Proactive financial planning at the start of the tax year ensures you don’t miss out on key opportunities. At Chase de Vere, we specialise in helping doctors navigate the complexities of tax and investment planning. Get in touch to discuss how you can make the most of the new tax year.
The information in this article is for guidance only and should not be considered financial advice. Tax treatment depends on individual circumstances and may be subject to change. The value of investments can go down as well as up, and you may not get back the amount originally invested. Tax planning strategies should be reviewed regularly to ensure they remain appropriate for your specific needs. You should seek professional financial advice before making any decisions.
Content correct at time of writing.