Don’t miss out: tax tips before the year end deadline

As the end of the tax year approaches, even the most financially savvy can benefit from a quick refresher on opportunities worth seizing. Some are routine housekeeping tasks that simply need ticking off before 5 April. Others may call for a deeper discussion about your financial affairs and long term tax strategy. 

With the UK tax burden at its highest level in decades and allowances pared back in recent years, it has never been more important to take full advantage of the reliefs that do remain. While each allowance may seem modest in isolation, their cumulative effect can be substantial even for the wealthiest households.

Take the £20,000 annual Individual Savings Account (ISA) allowance, which remains a remarkably powerful and entirely legal shelter from Income and Capital Gains Tax. Its impact speaks for itself: the UK now has thousands of “ISA millionaires”¹. With 6% annual returns, it’s possible to join their ranks in just over two decades. Good habits, compounded over time, are invaluable.

With that in mind, here’s an easy reminder guide of what to review, and act on, before the tax year ends.

1. Top up your ISA

For the 2025/26 tax year, you can contribute up to £20,000 across the ISA family including cash ISAs, stocks and shares ISAs, innovative finance ISAs and the Lifetime ISA (which carries a £4,000 cap). For children under 18, up to £9,000 can be placed into a Junior ISA.

One upcoming change to note:

• From April 2027, those under 65 will face a £12,000 cap on cash ISA contributions, with a further £8,000 available via stocks and shares ISAs.
• Savers aged 65+ will retain the full £20,000 cash ISA allowance.

If you plan to maximise ISA use, acting early and annually helps ensure you reap the full long term benefit.

2. Prioritise pension contributions

Pensions remain one of the most generous tax-planning tools available. You can contribute up to £60,000 each tax year to your pension (or a Self-Invested Personal Pension), benefiting from income tax relief at your highest marginal rate. Employers can also contribute on your behalf.

If you haven’t used your full allowance in the past three years, you may be able to carry forward unused relief, bringing your potential contribution to up to £200,000 this year.

For high earners, this is often one of the most efficient ways to optimise long-term wealth.

3. Consider lifetime gifts

For those thinking about Inheritance Tax (IHT), making gifts during your lifetime can be a strategic way to reduce the value of your estate.

Each tax year, you can give:

• £3,000 using your annual exemption
• £250 per person to as many individuals as you like through the small gift exemption
• Additional gifts out of surplus income, free from IHT

A couple fully using these allowances plus modest small gifts could reduce their taxable estate by £75,000 over ten years, potentially saving £30,000 in IHT.

4. Take control of capital gains

The annual Capital Gains Tax (CGT) exemption has been sharply reduced to £3,000. Beyond this threshold, CGT is charged at:

• 18% for basic rate taxpayers
• 24% for higher rate taxpayers

If you're planning to dispose of investments or assets, spreading sales over multiple tax years may help manage or significantly reduce the tax impact.

5. Review your overall tax position

Understanding how your income falls across tax bands can open the door to valuable planning opportunities.

For the current tax year:

• Your £12,570 personal allowance tapers once income exceeds £100,000.
• Income is then taxed at 20% (basic), 40% (higher) or 45% (additional), depending on thresholds.
• Pension income and business income can often be planned with precision to make the most of these bands.
• Don't forget the £500 dividend allowance, small but still useful.

For individuals with multiple income streams from businesses, pensions, property or investments a pre year end review can be especially worthwhile.