It’s that time of year again – consider your end of tax year planning

As the end of the 2025/26 tax year approaches, it’s the ideal time to ensure you’re making the most of tax-efficient opportunities before the new financial year begins on 6 April 2026. Here’s a reminder of some of the main tax planning opportunities: 

The ISA allowance is £20,000 for the 2025/26 tax year. You can put all £20,000 into a Cash ISA (until the allowance is cut to £12,000 for under 65s in 2027), or invest the whole amount into a Stocks and Shares ISA. You can also mix and match as long as the combined amount doesn’t exceed your annual ISA allowance. Junior ISAs work in the same way, but the maximum annual investment is £9,000 per child. 

The Annual Allowance is currently £60,000. An individual can’t use the full £60,000 Annual Allowance where ‘relevant UK earnings’ are less than £60,000, although your employer still could. You may be able to carry forward unused allowances from the past three years, provided you were a pension scheme member during those years. For every £2 of adjusted income (total taxable income including all pension contributions) over £260,000, an individual’s Annual Allowance is reduced by £1 until the minimum Annual Allowance of £10,000 is reached. 

If you have children under 18, a spouse who doesn’t work, or who isn’t earning enough to pay Income Tax, you can invest into a pension for each of them. The maximum annual contribution you can currently make is £2,880 which, with tax relief, amounts to £3,600 a year. 

IHT receipts show no signs of slowing, with recent HM Revenue & Customs data revealing continued year-on-year growth. Between April and September 2025, IHT receipts totalled £4.4bn, around £100m more than during the same period in 2024, representing a 2.3% increase. If the current pace continues, total receipts for the 2025/26 tax year could reach approximately £8.8bn, setting yet another record. Looking ahead, the Office for Budget Responsibility (OBR) forecasts that IHT revenues could potentially rise to £14bn by the end of the decade. 

Remember – you can make gifts worth up to £3,000 in each tax year. These gifts will be exempt from IHT on your death, even if you die within seven years. You can carry forward any unused part of the £3,000 exemption to the following year but if you don’t use it in that year, the exemption will expire. Certain gifts don’t use up this annual exemption, however, there is still no IHT due on them e.g. wedding gifts of up to £5,000 for a child, £2,500 for a grandchild (or great grandchild) and £1,000 to anyone else. Individual gifts worth up to £250 per recipient per tax year are also IHT free. Under current HMRC rules, gifts outside the above categories normally cease to count for IHT purposes upon the donor’s death if they live for at least seven years after making the gift – known as Potentially Exempt Transfers (PETs).  

If you have assets to dispose of or transfer, act now to ensure you take full advantage of this year’s CGT exemption. The annual CGT exemption is currently £3,000.  

If your assets are owned jointly with another person, you can use both allowances, which can effectively double the amount you can make before CGT is due. 

If you are married or in a civil partnership, you are free to transfer assets to each other without any CGT being charged. 

The dividend allowance is £500 for the current tax year. This is lower than in previous tax years and is set to remain at £500 for 2026/27. 

From April 2026, Dividend Tax rates are increasing – the basic rate rises from 8.75% to 10.75%, the higher rate rises from 33.75% to 35.75%, and the additional rate remains at 39.35%.  This change only affects dividends outside tax-protected exempt accounts such as ISAs or pensions. Dividends held within these are fully tax-free, allowing investors to grow their savings without additional liability. 

Venture Capital Trusts (VCTs) and Enterprise Investment Schemes (EISs) offer many attractive tax benefits to experienced investors. While the existing 30% rate of Income Tax relief on qualifying VCT investments reduces to 20% in April 2026, on the plus side, dividends received on these investments remain tax free. 

You’ve still got time – but don’t leave it to the last minute! Sensible tax planning can help to reduce the amount of tax you pay and safeguard your wealth for the future. We can help – please get in touch. 

Please note that this article is intended for educational purposes only and should not be taken as investment advice. Tax rules are subject to change and taxation will vary depending on individual circumstances. The value of investments can go down as well as up and you could get back less than you invested. Investment in funds will not be suitable for everybody and you should make yourself aware of the risks before investing and if you are unsure, you should seek professional advice.