Tax Year End Planning: Don’t Miss Your Allowance
As we approach the end of the tax year on 5 April, it’s a good time to pause and check whether you’re making full use of the tax allowances available to you. Many allowances are strictly “use it or lose it”, and once the tax year ends, unused opportunities are gone for good.
A little planning before the deadline can help reduce tax, boost long-term wealth, and keep more of your money working for you.
Below are some of the key areas to consider.
Make the Most of Your ISA Allowance
Each individual can invest up to £20,000 per tax year into ISAs, with no tax to pay on income or capital gains inside the wrapper.
If you haven’t used your full allowance yet, topping it up before 5 April can provide valuable long-term tax efficiency. Couples should remember that allowances are individual, so it’s often worth checking that both partners are fully utilising theirs.
Pension Contributions: Tax Relief and Long-Term Planning
Pension contributions remain one of the most effective ways to reduce your tax bill.
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You can usually contribute up to 100% of your earnings, capped by the annual allowance.
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Contributions benefit from income tax relief, potentially at 40% or 45% for higher and additional-rate taxpayers.
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Employer contributions can be especially efficient for business owners and directors.
It’s also important to consider:
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Carry forward of unused allowances from the previous three tax years
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The impact of the tapered annual allowance for higher earners
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Lifetime planning around access and future tax
Capital Gains Tax: Use Your Exemption
Each individual has an annual Capital Gains Tax (CGT) exemption, allowing you to realise gains without paying CGT.
If you hold investments outside tax-efficient wrappers such as ISAs or pensions, it may be worth reviewing:
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Whether gains can be realised before the tax year end
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Whether assets can be transferred between spouses to utilise both exemptions
With CGT allowances significantly reduced in recent years, careful planning is more important than ever.
Dividend Allowance and Investment Income
If you receive dividend income outside of ISAs or pensions, ensure you are aware of the dividend allowance and how excess income may be taxed.
A review before the tax year end can help determine whether restructuring investments could reduce future tax exposure.
Inheritance Tax: Gifting and Estate Planning
Tax year end is also a sensible time to review estate planning.
You may be able to:
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Make use of the £3,000 annual gifting allowance
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Consider regular gifts from surplus income
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Review trust planning or life cover written in trust
Small, regular steps can make a meaningful difference over time.
Why Early Planning Matters
Tax year end planning isn’t about rushing decisions at the last minute — it’s about making informed choices that align with your wider financial goals.
Starting early gives you:
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More flexibility
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Better cash-flow planning
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Time to ensure actions are appropriate and sustainable
Final Thoughts
Everyone’s circumstances are different, and tax rules can be complex. What works well for one person may not be suitable for another.
If you’d like to review your position ahead of the tax year end and make sure you’re not missing valuable opportunities, professional advice can help bring clarity and confidence.
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MD & Certified Financial Planner
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