Setting the stage: How to give your loved ones a head-start this tax year-end

When you’ve got more than your own situation to think about, managing your finances can sometimes feel like spinning plates. But by making smart use of your tax allowances before the end of the tax year, you can build a strong foundation for more than one generation of your family.


  • Balancing the demands of a young family and ageing parents can create financial stress from various directions for members of the ‘sandwich generation’.
  • Providing your children with a financial head-start helps spread wealth across the generations.
  • Leveraging current tax reliefs and allowances can alleviate any pressure, ultimately enhancing the overall financial well-being of your entire family.


In your 40s and 50s, financial responsibility often extends beyond supporting just one generation. Indeed, many individuals can find themselves financing three – shouldering the dual responsibility of securing their children’s future financial well-being and caring for their ageing parents.

And as well as being squeezed financially from both sides, those in the aptly-named ‘sandwich generation’ will also be contemplating their own retirement plans – and whether the numbers add up.

Tony Clark, Senior Propositions Manager at St. James’s Place, says:

“Your priorities change over time, especially when you’re working out how to balance your own financial well-being with that of your children’s in the future. Our mindset about money is changing, just as our attitude to work and careers is changing. Our personal goals become family goals.

“Money is moving up, down and across generations. Nowadays, people are thinking: ‘How can I make the most of my money for me and my family?’ Where we can add real value and peace of mind is helping make sure that it’s happening in the most tax-efficient and future-proof way.”

If this rings all too true, you need to remember that in order to continue caring for your children and your parents, you must take care of yourself! Here’s how you can do so…

Are you using all your tax allowances?

Given the various financial demands you face, it’s prudent to take advantage of the tax allowances that are right in front of you. Take, for instance, the annual £20,000 ISA subscription allowance. If you haven’t already, consider delving into ISAs as a straightforward and tax-friendly starting point. Cash ISAs make a good, tax-efficient home for rainy-day funds, while Stocks & Shares ISAs can provide the potential for growth from your investments to help achieve your longer-term goals, like purchasing a new home or funding your children’s education.

Tax-efficient savings can also play a role in alleviating long-term care costs for your loved ones, providing peace of mind for both them and your.

Giving your children a tax break too

Despite having so many competing priorities, the fact remains that if you want to start your little ones on a savings path, then the earlier these savings are started, the better – and it makes sense to take advantage of the opportunities in this tax year.

Opening a Junior ISA (JISA) for them means they can build up a tax-efficient pot of money. The maximum you can pay into a JISA is £9,000 in any tax year. They can either access that at 18 or roll it over into a standard ISA and continue to save. It’s a great way to help them achieve their future ambitions, whether that’s getting their first mortgage or travelling abroad.

Although anyone can contribute to an ISA for a child, only the parent/legal guardian can open the ISA for them.

Clark continues:

“You might also be thinking about helping them get into university, deal with student debt or get on the property ladder. Today’s teenagers may face working and retirement lives that are very different from our own, so giving them a practical, financial head start can really help when they start building their own careers and lives.”

Plus, it gets them into the habit of saving regularly, building their own financial resilience and money management skills.

Junior pensions and pension tax relief

Pensions can often take a back seat until we’ve established our careers. Nevertheless, parents or legal guardians have the opportunity to open a Junior Pension for their children right from birth. Contributing up to £2,880 annually to their pension is not only a smart move but also benefits from a 20% pension tax relief, increasing the total to £3,600.

While it may not be the first thing on your mind with a young family, the tax advantages associated with pensions make even modest, regular contributions each month significant. This foresighted approach can pave the way for your children to fulfil their dreams as they grow older, providing them with opportunities you may not have envisioned when you reach their age and beyond.

Clark says:

“Giving them a leg up in their adult life as well as setting something up for later in their lives can really open up their choices when they begin to approach retirement.”

How to pay less Capital Gains Tax

It’s easy to overlook the annual Capital Gains Tax (CGT) exemption, which can make a big difference to the amount of money you have to invest, save or pass on to your family. CGT is the tax applied to profits from the sale of if you sell a property or asset that has increased in value.

For the current 2023/24 tax year, the CGT exemption allows the first £6,000 of profit to be tax-free. However, this exemption is set to reduce to £3,000 in 2024/25. If you’re contemplating selling assets or making investments to pass wealth within your family, now is an opportune time to consult with your financial adviser.

Navigating CGT involves considerations of your tax band and the asset in question, making professional advice invaluable in this complex area of tax planning. Strategically managing these financial aspects becomes increasingly vital as your assets accumulate with age.

Keeping it in the family

We spend much of our lives earning, saving and investing. But just as important is knowing how and when to start spending your money or using it to help other members of the family. You’ll have the reward of seeing your money help those you love – and know that you’ll be lowering your eventual IHT bill.

Win-win – as you can help you keep more money in your family!

Staying ahead of the game

Most of the tax allowances and tax reliefs you can claim are on a use-it-or-lose-it basis, so planning ahead is important, especially as tax year-end approaches in April.

Talking your options through with an expert who understands your financial goals as a family will help you feel confident about the choices you’re making for your children.

Clark concludes:

“It creates financial well-being for your whole family. That’s the best investment you can make.”

The value of an investment with St. James’s Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than the amount invested.

An investment in a Stocks and Shares ISA will not provide the same security of capital associated with a Cash ISA or a deposit with a bank or building society.

The levels and bases of taxation, and reliefs from taxation, can change at any time and are generally dependent on individual circumstances.

Cash ISAs are not available through St. James’s Place.