With the tax year end approaching, now is the ideal time to review your finances and ensure you’re making full use of available reliefs and allowances. Here are the key areas to consider before 5 April 2026.
Maximise your savings
If you have spare funds, making use of your £20,000 ISA allowance for 2025/26 remains one of the simplest and most effective tax-efficient strategies.
For those aged 18–39, a Lifetime ISA can also be appealing. You can save up to £4,000 each year and receive a 25% government bonus (up to £1,000 annually), supporting your first home purchase or retirement planning. However, recent publicity has highlighted penalties for early withdrawals, which can result in receiving less than you contributed. It’s important to consider carefully whether this type of ISA is right for you.
Review pension contributions
Increasing pension savings before year end can provide valuable tax advantages:
- Basic-rate taxpayers benefit from a 20% government top-up on contributions.
- Higher-rate taxpayers can claim additional relief via their tax return.
- Those earning between £100,000 and £125,140 may gain even greater benefit, as pension contributions can help restore personal allowance — creating an effective tax saving of up to 60%.
As contribution timing and annual limits can affect outcomes, personalised advice is recommended.
Use your Capital Gains Tax allowance
If you have not yet used your £3,000 CGT annual exemption for 2025/26, consider whether bringing forward disposals before 6 April 2026 would be beneficial.
In addition, rates for Business Asset Disposal Relief and Investors’ Relief are set to increase again in April 2026, providing further incentive to plan qualifying disposals early where appropriate.
Inheritance Tax relief changes
From April 2026, the proposed cap on Agricultural Property Relief and Business Property Relief will rise to £2.5 million per individual, with unused allowances transferable between spouses or civil partners. This means couples could potentially pass on up to £5 million of qualifying assets free from inheritance tax — a significant estate planning opportunity.
Taking action before the tax year end can unlock meaningful tax savings. Reviewing your position now ensures you’re well placed to make the most of available planning opportunities.