Smart financial moves to consider before the tax year ends on 5 April 2026.
As the 2025/26 tax year-end approaches on 5 April 2026, now is the time to review your finances to ensure you’ve maximised all available allowances and reliefs.
Tax year-end planning can help you save money, improve your long-term investments, and make better use of government incentives before they reset in April. Here are five key areas to consider before the deadline.
1. Make the most of your ISA allowance
Individual Savings Accounts (ISAs) remain some of the most effective methods to protect your money from tax. For the 2025/26 and 2026/27 tax years, the annual allowance is £20,000. Any returns earned from an ISA are completely free from Income Tax and Capital Gains Tax.
You can allocate your allowance across different types of ISAs, such as cash, stocks and shares, or innovative finance, or combine it in one. The key is to act before 5 April 2026, as unused allowances cannot be carried forward. When the new tax year begins on 6 April, your allowance resets, offering a fresh opportunity to save or invest tax-free.
2. Boost Your Pension Contributions
Pensions remain one of the most tax-efficient ways to save. In the 2025/26 tax year, you can contribute up to £60,000 annually or 100% of your earnings, whichever is lower. This annual allowance includes all contributions, such as those from your employer.
However, the 100% earnings limit applies only to personal contributions that qualify for tax relief. Contributions benefit from tax relief at your highest marginal rate, meaning every £80 you contribute as a basic-rate taxpayer effectively becomes £100 in your pension fund. Higher and additional-rate taxpayers can claim further relief through self-assessment, but only on contributions up to the income taxed at those rates.
If you have unused allowances from the past three tax years, you could use the ‘carry forward’ rule to make larger contributions.
Even those who are not earning can contribute up to £2,880 each year, with the government adding £720 in tax relief. Boosting your pension contributions before the end of the tax year can lower your taxable income and enhance your long-term retirement savings.
3. Use Your Personal Allowance Wisely
Everyone has a personal allowance, currently £12,570, which is the amount you can earn each year without paying tax. Married couples and civil partners can also benefit from the Marriage Allowance, which allows the non-taxpayer to transfer a fixed £1,260 of their personal allowance to a partner who pays basic-rate tax. This could save up to £252 in the 2025/26 tax year, and claims can be made retrospectively for up to four years.
If one partner pays less or no tax, and if the other pays basic-rate tax, transferring the allowance could reduce your overall tax liabilities. Remember that unused savings or dividend allowances cannot be carried forward, so efficient planning can help maximise the use of both partners’ allowances each year.
4. Review Your Inheritance Tax Position
Inheritance Tax (IHT) is levied at 40% on estates exceeding £325,000, a threshold that remains unchanged until April 2028. An additional £175,000 ‘residence nil-rate band’ applies when passing on your home to direct descendants.
You can reduce future IHT liabilities by making gifts during your lifetime. Annual gifts of up to £3,000 per year are exempt, and unused allowances can be carried over for one year if unused, giving the potential for a £6,000 gift. You can also give small gifts of up to £250 per person. Larger gifts may also be exempt if you live for seven more years after making them.
Regular gifts made from surplus income, such as paying a grandchild’s school fees, can also fall outside your estate if structured correctly. Reviewing your estate plans annually ensures you are maximising these allowances.
5. Manage Your Capital Gains
If you hold investments outside of tax wrappers, consider reviewing them before the end of the tax year. The Capital Gains Tax (CGT) annual exempt amount is £3,000 (a maximum of £1,500 for trusts) for 2025/26. Gains exceeding this threshold are taxed at 18% for basic-rate taxpayers on any gain within the basic-rate band and 24% for higher and additional-rate taxpayers (or basic-rate income tax payers on gains that fall above the income threshold when added to income).
Couples can transfer assets without tax to optimise both exemptions. Making strategic disposals before 5 April could help realise gains efficiently and reduce potential tax liability in future years.
Are you prepared for the 2025/26 tax year-end?
Taking action before 5 April can help you reduce your tax, maximise allowances, and strengthen your financial position. Reviewing your ISAs, pensions, and estate plans now ensures you make the most of every opportunity. To find out what steps you should consider, please speak to us.
This article is for information purposes only and does not constitute individual financial advice. Tax treatment depends on the individual circumstances and may change in the future. A pension is a long-term investment not normally accessible until age 55 (57 from 2028) unless you have a protected pension age. The value of your investments (and any income from them) can go down as well as up, which would mean less to live on in retirement. Levels of pension benefits available in retirement will also vary and are not guaranteed, as they will rise in value, and you may get back less than you invest.