The tax year ends on 5 April 2026; and once it passes, many valuable allowances reset.
Every year, individuals and families miss opportunities to reduce their tax bill simply because they leave planning too late. Whether you’re employed, self-employed, a company director, or approaching retirement, reviewing your finances before the tax year ends could save you thousands of pounds.
Here’s what you should be reviewing now.
Why Tax-Year End Planning Matters
Tax rules and allowances can change each year. What worked last year may not be the most tax-efficient approach today.
Many allowances are:
- “Use it or lose it”
- Limited to the current tax year
- Structured differently depending on income level
Acting before 5 April 2026 can help you:
- Reduce income tax
- Increase retirement savings
- Protect investment gains
- Plan for inheritance tax
- Improve long-term wealth efficiency
Tax-year end planning isn’t just about saving money now, it’s about positioning your finances correctly for the years ahead.
Key Tax Allowances for 2025/26 You Should Review
1. Personal Income Tax Allowance (£12,570)
For the 2025/26 tax year, the personal allowance is £12,570. This means you can earn up to this amount before paying income tax.
However, if your income exceeds £100,000, your personal allowance reduces by £1 for every £2 earned above that threshold. Once income reaches £125,140, the allowance is lost completely.
Planning opportunity:
If you fall within this range, pension contributions or charitable donations could help restore your personal allowance and significantly reduce your effective tax rate.
2. Pension Contributions (Up to £60,000)
The annual pension allowance for 2025/26 is 100% of earned income up to £60,000.
You may also be able to carry forward unused allowances from the previous three tax years.
Pension contributions can:
- Reduce your taxable income
- Provide tax relief at your highest marginal rate
- Potentially reduce National Insurance (via salary sacrifice)
- Boost long-term retirement savings
Example scenario
Imagine earning £95,000 and receiving a £10,000 bonus. Taking it as cash would result in income tax at 40%. Redirecting it into a pension instead could provide full higher-rate tax relief and significantly increase the net amount invested.
Many higher earners overlook this powerful opportunity before tax-year end.
You can also:
- Contribute to a non-working spouse’s pension (up to £2,880 net / £3,600 gross)
- Contribute to children’s pensions
- Increase contributions to maximise employer matching
Case studies used are fictional and for illustrative purposes only.
Don’t Miss Valuable Tax Relief
If you’re unsure whether you’re fully using your allowances, a structured review can identify missed opportunities.
3. ISA Allowance (£20,000)
For 2025/26, you can invest up to £20,000 into ISAs.
Benefits include:
- No income tax on interest
- No capital gains tax
- No tax reporting requirements
Junior ISA allowance: £9,000 per child
Unused ISA allowance cannot be carried forward beyond 5 April.
Many investors also use their Capital Gains Tax allowance to gradually move money from taxable accounts into ISAs in a tax-efficient way.
4. Capital Gains Tax (CGT) Allowance (£3,000)
The Capital Gains Tax exemption for 2025/26 is £3,000.
This is the amount of profit you can realise from selling assets before CGT applies.
Planning strategies may include:
- Realising gains up to the annual exemption
- Offsetting gains against previously declared losses
- Phasing disposals across tax years
- Transferring assets to a spouse (which is tax-neutral)
- Using gains to fund ISA contributions
If losses are not claimed within four years, they are lost, another often-missed planning point.
5. Dividend Allowance (£500)
You can receive £500 in dividend income tax-free in 2025/26, in addition to your personal allowance.
This is particularly relevant if you:
- Own shares
- Invest in equity-based funds
- Run a limited company
Married couples can structure holdings to ensure both dividend allowances are used efficiently.
6. Savings Allowances
Depending on your tax band:
- Basic-rate taxpayers: £1,000 savings allowance
- Higher-rate taxpayers: £500
- Additional-rate taxpayers: £0
There is also a starting rate for savings of up to £5,000 for those with lower overall income.
In some situations, combining allowances can allow up to £17,570 of income to be received tax-free.
This is especially relevant for retirees drawing income from multiple sources.
7. Inheritance Tax Planning
Current thresholds:
- £325,000 Nil Rate Band
- £175,000 Residential Nil Rate Band
- Potential £1 million combined allowance for married couples
Annual gifting allowances include:
- £3,000 per person per tax year
- Ability to carry forward one unused year
- Small gifts up to £250 per recipient
- Wedding gift exemptions
- Regular gifts from surplus income (if structured correctly)
If these exemptions are not used before tax-year end, they may be lost.
For larger estates, strategies such as trusts or life cover may be considered as part of a broader estate planning approach.
Concerned About Inheritance Tax?
Estate thresholds haven’t risen with inflation, which means more families are now exposed.
Check your inheritance tax liability here, using our free IHT calculator
Speak to an adviser before 5 April to protect your family’s wealth.
8. More Advanced Tax Planning (For Experienced Investors)
Certain higher-risk investments, such as Venture Capital Trusts (VCTs) and Enterprise Investment Schemes (EIS), can offer:
- 30% upfront income tax relief
- Potential CGT deferral (EIS)
- Tax-free dividends (VCT)
These are complex, high-risk investments and are not suitable for everyone, but may be appropriate for experienced investors looking for additional tax efficiency.
Why Acting Early Matters
Leaving tax planning until late March:
- Reduces your options
- Increases pressure
- Limits administrative time
- Restricts strategic flexibility
The earlier you act, the more opportunities are available.
Who Should Consider a Tax-Year End Review?
You should strongly consider reviewing your position if you:
- Earn over £50,000
- Earn over £100,000
- Receive bonuses
- Are self-employed or a company director
- Have investments outside ISAs
- Are within 10 years of retirement
- Have an estate approaching IHT thresholds
- Want to invest for children or grandchildren
The Bigger Picture: It’s Not Just About This Year
Tax-year end planning isn’t a checklist exercise.
Done properly, it:
- Reduces tax drag on your investments
- Accelerates retirement readiness
- Protects family wealth
- Aligns financial decisions with long-term goals
- Creates peace of mind
Small changes before 5 April can create meaningful differences over decades.
Don’t Let Valuable Allowances Go Unused
Many tax allowances reset every year.
Once 5 April passes, the opportunity is gone.
If you’d like to review your position before the tax year ends, speaking to a qualified adviser can help you:
- Identify unused allowances
- Reduce unnecessary tax
- Structure investments efficiently
- Align tax planning with your wider financial goals
How We Help with Tax Year End Planning
At Beals Wealth Management, we provide structured tax-year end reviews to:
- Analyse income and tax position
- Review pension allowances and carry forward
- Assess CGT exposure
- Optimise ISA strategy
- Review dividend and savings income
- Discuss IHT mitigation strategies
- Align tax planning with long-term goals
Tax planning is not just about this year, it’s about building long-term wealth efficiently.
Book Your Tax-Year End Review Before 5 April 2026
The earlier you review your position, the more opportunities are available.
📞 01489 585 548
📧 [email protected]
Contact Our Team Here
Start planning today, your future self will thank you.
Tax treatment varies according to individual circumstances and is subject to change.
The value of investments and pensions and the income they produce can fall as well as rise. You may get back less than you invested.
For investors do not pay any personal tax on income or gains, but ISAs may pay unrecoverable tax on income from stocks and shares received by the ISA manager.
Tax planning, Estate Planning, Trusts and Inheritance Tax Planning are not regulated by the Financial Conduct Authority.
For more information:
You can read more about our services here: