The build-up to tax-year end is always crucial for financial planning. April 5 is the last day of the current tax year, so you still have until then to make the most of several allowances – and potentially give your savings a boost.
Here’s a rundown of the main areas to think about.
Maximise your ISA allowance
You can invest up to £20,000 in an ISA, or across different ISAs, and any growth, interest or dividends are tax free.
This is particularly valuable given that Capital Gains Tax rates on shares are now 18% for basic-rate taxpayers and 24% for higher-rate taxpayers. Dividend tax rates are even steeper – 8.75% and 33.75% respectively.
Unused ISA allowances cannot be carried forward – so if you haven’t used yours, now is the time.
- Cash or stocks and shares ISA: up to £20,000
- Junior ISA: up to £9,000 per child
- Lifetime ISA: for those under 40, up to £4,000. These offer a 25% government bonus on contributions, up to a maximum of £1,000 per year.
Use your Capital Gains Tax allowance
If you have investments outside of an ISA, you might be subject to Capital Gains Tax (CGT) when selling them. CGT allowance is now just £3,000 – a fraction of the old rate of over £12,000. But it’s not all bad news. If you’re planning to sell investments, you could consider timing the sale across tax years to use the exemption twice.
And remember you can transfer assets to a spouse or civil partner without triggering a tax charge, which means you can effectively use both exemptions if needed.
Top up your pension
Pension contributions remain one of the most effective ways to reduce your tax bill. For every £1,000 you contribute, the government adds £250 in basic rate relief – and higher rate taxpayers can claim a further £250 through self-assessment. The annual allowance is £60,000, and unlike other allowances such as ISAs, unused allowance from the past three years can be carried forward. If you’re not sure whether you’ve made the most of this, it’s worth checking before 5 April.
One group where this is particularly important: if your income falls between £100,000 and £125,140, pension contributions can help restore your personal allowance and reduce an effective tax rate that, in this band, can reach 60%. It’s one of the more counter-intuitive aspects of the UK tax system, and one where good planning makes a significant difference.
Make use of your gifting allowances
With inheritance tax (IHT) thresholds frozen until 2031 and pensions set to be included in estates from 2027, more families are being drawn into the IHT net. But there are options for mitigating this.
The annual gifting allowance is a simple and often underused starting point. Everyone can give away £3,000 per year free of IHT – and if you didn’t use last year’s allowance, you can carry it forward, meaning you could give up to £6,000 before 5 April. Gifts of up to £250 per person are also exempt, as are regular gifts from surplus income as long as they are part of a regular pattern and don’t reduce your standard of living.
It’s also worth noting that the rules around Agricultural and Business Property Relief have recently been updated. From 6 April 2026, the government is capping 100% inheritance tax relief on combined Agricultural and Business Property Relief to the first £2.5 million of assets. Values exceeding £2.5 million will receive 50% relief. So if IHT planning is on your mind, these changes are worth thinking about sooner rather than later.
Act before 27 March
With Easter falling early this year, we’d suggest treating 27 March as your effective deadline – that gives us time to act on anything before the 5 April cut-off. Please take a look at our personalised tax year-end checklist. If anything stands out, or you’d like to bring your planning meeting forward, just get in touch.
Tax planning doesn’t need to be complicated, but it does require some thought. With thresholds frozen and more people being pulled into higher tax bands, even small adjustments can make a meaningful difference to what you keep and what you hand over.
If you’d like to discuss which of these strategies might work for your situation please get in touch. We’re here to help you make sure you’re not paying more than you need to.
Quick recap
• Use every allowance available – pensions, ISAs, and savings.
• Time asset sales and withdrawals to stay tax efficient.
• Consider how sharing income with a partner could help.
• Review your finances each year as rules and thresholds change.
• A little forward planning can make a big difference to what you keep.
