Tax planning before 5th April 2026: your year-end checklist

As the end of the 2025/26 tax year steadily approaches, now is the ideal time to review your finances and make sure you’re making the most of all available tax reliefs and allowances. Many of these operate on a strict “use it or lose it” basis. This means a few proactive tax planning steps before 5th April 2026 could make a real difference.

With this in mind, here’s our practical year-end checklist to help you start planning today. If you need tailored help, contact our expert tax team for professional tax planning advice.

1. Review your income and allowances

Everyone has a personal allowance – currently £12,570 – that can be earned before paying Income Tax. If your income fluctuates or you have control over when you receive certain payments (such as dividends or bonuses), some careful timing could keep you within the most efficient tax bands.

If you’re married or in a civil partnership, you may be able to transfer up to £1,260 of your personal allowance to your higher earning spouse or civil partner using the Marriage Allowance. This can reduce their tax by up to £252. However, for this strategy to be worthwhile, the lower earner should have an income below the personal allowance.

If one partner pays tax at a lower rate, it’s also worth considering whether investments or assets can be held in their name to make use of their allowances. Speak to a tax specialist before you make any changes.

2. Make the most of ISAs and pensions

ISAs remain one of the simplest and most effective tools for tax-free saving. You can invest up to £20,000 in ISAs this tax year – across Cash, Stocks & Shares, Innovative Finance or Lifetime ISAs – and any income or gains are completely free of tax. Note that you can put away a maximum of £4,000 into a Lifetime ISA each year, and this counts towards your £20,000 limit. Remember that your ISA allowance doesn’t carry forward, so it must be used by 5th April each year.

Pensions are another cornerstone of good tax planning. You can contribute up to £60,000 per year, or 100% of your earnings if lower, and benefit from tax relief at your marginal rate. Higher and additional-rate taxpayers can claim extra relief through their tax return. You can also carry forward unused allowances from the previous three tax years, provided you were a member of a registered pension scheme during that time. Making a pension contribution made before 5th April could reduce your taxable income for 2025/26. This could help keep you below higher-rate tax thresholds.

3. Use your Capital Gains Tax exemption

The Capital Gains Tax (CGT) annual exemption has fallen sharply in recent years and is now just £3,000 per individual. If you’re planning to sell shares, property (other than your main home), or other investments, it’s important to consider timing.

If you’ve made capital losses in the past four years, report them to HMRC – they can be carried forward to offset future gains. You have up to four years after the end of the tax year to claim these losses.

4. Salary and dividends for company directors

For directors of limited companies, tax planning advice often focuses on finding the right balance between salary and dividends. Paying yourself a small salary (to make use of the personal allowance and qualify for National Insurance credits) and then taking dividends up to the dividend allowance can be efficient.

The dividend allowance for 2025/26 is just £500, so timing and structure are key. Make sure all dividends are properly declared and recorded in board minutes. HMRC expects clear documentation.

5. Consider Inheritance Tax planning

Inheritance Tax (IHT) may not be everyone’s favourite topic, but planning early could protect more of your estate for your loved ones. Each individual has an annual gift allowance of £3,000, which can be carried forward one year if unused. Smaller gifts of up to £250 per person are also exempt. You can also make lifetime gifts under the ‘7-year rule’.

If you’re helping children or grandchildren financially, wedding gifts and regular gifts out of income can also be exempt from IHT – provided certain conditions are met. Trusts can be useful tools for passing on wealth while retaining some control. However, you should only use them after seeking professional Inheritance Tax planning advice.

Be sure to keep records of all gifts made – especially those out of income – as this can make IHT calculations much smoother later on.

6. Plan early and get expert advice

The best tax planning advice is personal. No two situations are identical, and small details often have a big impact – especially for business owners, landlords and those with multiple income sources. Talk to your accountant early so you have time to act before allowances reset on 5th April.

At THP, we provide tailored year-end reviews and bespoke tax planning strategies for individuals and businesses. To arrange a review, please get in touch with one of our friendly tax planning specialists today.