Tax Year End Planning UK: Key Financial Steps Before 6 April 2026

March 12, 2026

The end of the 2025/26 tax year is approaching fast. With ISA allowances, pension contributions, Capital Gains Tax thresholds and gifting exemptions all resetting on 6 April, now is the time to review your finances and make sure you are not leaving money on the table.

Research conducted by Ipsos on behalf of Standard Life found that 83% of UK adults believe life has become less predictable, and 59% say they feel less confident about their financial future. Against this backdrop, making the most of the allowances available before 6 April 2026 has never been more important.

The 2025/26 tax year ends on 5 April 2026. After that date, a range of valuable allowances disappear for good. They cannot be carried forward, rolled over, or reclaimed. This guide covers everything you need to act on before the deadline.

Key Tax Allowances to Use Before 6 April 2026

Why Acting Early Matters

It is easy to put financial planning on the back burner. But when it comes to tax allowances, delaying costs you money. Once the tax year closes, unused allowances are lost permanently.

As the March/April 2026 edition of IFA Fundamentals puts it: "Everything you do now could secure tax savings before it's too late. Leaving action down to the wire often leads to missed opportunities for your money to grow tax-free and prompts rushed, potentially poor decisions."

The good news is that acting early gives your money more time to work for you. ISA investments made in March rather than the following April have an extra year of tax-efficient compounding. That adds up meaningfully over time.

Key Financial Steps Before the Tax Year Ends

Here is a practical checklist of the most important steps to consider before 6 April 2026.

• Use your ISA allowance before it expires on 5 April
• Maximise pension contributions and claim available tax relief
• Review your Capital Gains Tax position if you hold investments outside an ISA or pension
• Check your dividend income against the £500 dividend allowance
• Top up Junior ISAs for children or grandchildren
• Make tax-efficient gifts using annual gifting exemptions
• Review spousal transfers to make use of lower-rate allowances where appropriate

None of these steps need to be complicated. But each one requires you to act before the deadline.

Making the Most of Your ISA Allowance

The ISA allowance for the 2025/26 tax year is £20,000 per person. You can split this across Cash ISAs, Stocks and Shares ISAs, Innovative Finance ISAs, and Lifetime ISAs as you choose.

The real advantage of an ISA is that all growth, interest and dividends within it are completely free of tax. You will never pay Capital Gains Tax or Income Tax on money held inside an ISA, no matter how much it grows.

But this protection only applies to money that is inside the ISA before the deadline. If you leave cash sitting outside an ISA and miss the 5 April cutoff, you have missed the tax shelter for that year. The allowance does not roll over.

For couples, the combined allowance is £40,000. Using both allowances is one of the most straightforward ways to shelter significant sums from tax each year.

Junior ISAs

If you have children or grandchildren, do not overlook the Junior ISA (JISA). Each eligible child can receive up to £9,000 per tax year into a JISA. Like adult ISAs, this money grows free of tax and can be a powerful way to build a fund for their future.

Unlike adult ISAs, children cannot access JISA money until they turn 18. This makes it well suited for long-term savings goals, such as university costs, a first property, or a financial foundation to start adult life.

Read our full guide: How to Use Your ISA Allowance Before the Tax Year Ends

Boosting Your Pension Before 6 April

Pensions remain the most tax-efficient savings vehicle available to most UK adults. Contributions attract tax relief at your marginal rate, meaning a basic rate taxpayer paying in £800 has their contribution topped up to £1,000 by HMRC. Higher and additional rate taxpayers can claim even more through their self-assessment tax return.

The annual pension allowance for 2025/26 is £60,000, or 100% of your earnings, whichever is lower. Most people are nowhere near this limit, which means there is often headroom to top up significantly before the year closes.

For those with no earnings or low earnings, contributions of up to £3,600 gross are still possible, with the government adding basic rate tax relief.

Carry Forward of Unused Allowances

One important feature of pensions is that unused annual allowances from the previous three tax years can be carried forward, provided you were a member of a registered pension scheme in those years. This means some people can make pension contributions substantially above the standard £60,000 limit, particularly those who received a bonus or came into a significant sum of money.

Carry forward can be especially useful for:

• Business owners who have had a particularly profitable year
• Professionals who received a large bonus or settlement
• Those approaching retirement who want to maximise their pot
• Anyone who was unable to contribute in earlier years

It is worth reviewing how much carry forward you might have available before the tax year ends.

Read our full guide: How Pension Contributions Can Reduce Your Tax Bill

Capital Gains Tax and the £3,000 Allowance

The Capital Gains Tax (CGT) annual exempt amount has been reduced significantly in recent years. For the 2025/26 tax year, individuals can realise gains of up to £3,000 before CGT applies. For most trusts, the limit is £1,500.

If you hold investments outside an ISA or pension that have grown in value, it may be worth reviewing whether to crystallise some of those gains before 6 April. Once the tax year closes, this year's allowance is gone.

A strategy known as bed and ISA involves selling non-ISA investments to realise a gain, and then immediately repurchasing them within an ISA. This can shelter future growth from CGT, though there is a brief period out of the market. Professional advice should be sought before using this approach.

Similarly, if you have made losses on investments, these can be offset against gains in the same tax year. Losses that exceed gains in a given year can be carried forward indefinitely. Keeping track of these figures is an important part of year-end planning.

The Dividend Allowance: Down to £500

The dividend allowance, which sets the amount of dividend income you can receive tax-free each year, has been cut significantly. For 2025/26 it stands at just £500 per person.

If you hold shares or investment funds outside an ISA or pension, and those holdings pay dividends, you may be exceeding this threshold without realising it. Once you cross the limit, dividend income is taxed at 8.75% for basic rate taxpayers, 33.75% for higher rate taxpayers, and 39.35% for additional rate taxpayers.

Moving income-producing investments into your stocks and shares ISA before the deadline can eliminate this tax cost going forward.

Inheritance Tax Planning and Gifting Allowances

The annual gifting exemption allows each individual to give away up to £3,000 per tax year free of Inheritance Tax. This exemption can be carried forward one year, so if last year's was unused, you could gift up to £6,000 this tax year. Couples can each use their own allowance, potentially giving £12,000 combined without any IHT implications.

There are also other gifting exemptions worth using before the year end:

• Small gift exemption: Up to £250 per person per year (provided they have not already received from your main exemption)
• Wedding gifts: Up to £5,000 for a child, £2,500 for a grandchild, £1,000 for anyone else
• Gifts from surplus income: Regular gifts made from income, not capital, can fall outside your estate provided they do not affect your standard of living

With Inheritance Tax charged at 40% on estates above the nil-rate band, these annual exemptions can add up to meaningful savings for families who plan carefully over time.

Read our full guide: Smart Gifting: Tax Efficient Ways to Support Your Family

Why Financial Planning Matters in Uncertain Times

The backdrop to this tax year end is one of growing financial uncertainty. Research conducted by Ipsos on behalf of Standard Life in June 2025 found that 83% of UK adults agree that life has become less predictable. A further 59% say they feel less confident about their financial future because of recent changes in the UK.

The same research found that nearly all UK adults (94%) are concerned about rising prices, and 91% worry about energy bills. These pressures are changing financial behaviour. Almost a quarter (23%) of adults are opting for cash savings rather than investments, while one in five (19%) are considering delaying retirement.

However, holding too much in cash carries its own risks. Inflation erodes the real value of cash savings over time. A balance between short-term accessible savings and longer-term investments remains important, even in uncertain periods.

Practical steps people can take right now include:

• Reviewing your pension to check contributions and projected retirement income
• Making sure your investment strategy still reflects your risk tolerance and time horizon
• Exploring your options for drawing income from pensions and other assets
• Balancing accessible cash savings with longer-term investment growth
• Seeking professional guidance if you feel uncertain about the right path

Long-Term Financial Planning: Looking Beyond This Tax Year

Investing an Inheritance

Inheriting wealth can be life-changing, but it also comes with important decisions. One common mistake is holding too much in cash for too long after receiving an inheritance. While it is entirely reasonable to take time before making investment decisions, cash loses value in real terms when inflation is running above interest rates.

A diversified investment approach, aligned with your goals and time horizon, is usually more effective than leaving large sums sitting in low-interest savings accounts. Whether your priority is retirement income, supporting family, or building long-term wealth, a structured investment strategy can help achieve it.

It is also worth reviewing the Inheritance Tax position of your own estate if you receive a significant sum. An inheritance that increases your estate could mean a larger IHT bill for your own beneficiaries in the future. Planning at this stage can make a material difference.

Read our full guide: Investing an Inheritance: What Should You Do First?

Long-Term Care Planning

One of the most significant and often overlooked financial risks is the cost of long-term care. It is estimated that one in four of us will need some form of long-term care at some point in our lives.

The financial implications can be substantial. Average weekly fees for a residential care home in England have now reached £949 per week, an increase of 19% since 2021/22. For those requiring nursing care, the average weekly cost is £1,267, an 18% rise over the same period. In the South East, nursing care fees average £1,457 per week.

State support is available, but it is strictly means-tested. In England, if your assets including property exceed £23,250, you are likely to fund your own care. Many people are surprised to learn that their home may need to be sold to meet care costs if alternative funding is not in place.

Planning ahead offers a range of options:

• Immediate needs annuities for those already receiving care, providing guaranteed income for life in exchange for a lump sum
• Dedicated insurance policies for those planning ahead who want to protect against care costs
• Earmarked investment strategies designed to grow a fund for future care needs
• Equity release for homeowners who wish to stay at home and fund domiciliary care by unlocking property value

Each option has tax implications and risks. Professional advice is essential to identify the right approach for your situation.

Supporting the Self-Employed

For self-employed professionals, pension planning deserves particular attention at year end. Research for Aviva found that nearly two-thirds of self-employed and freelancers are not saving enough for retirement, with more than 45% reporting no private pension savings at all.

Without an employer automatically enrolling you into a workplace scheme, retirement saving falls entirely to you. The tax year end is a good moment to review contributions and, if income has been higher than expected this year, consider topping up before 5 April to take advantage of the available tax relief.

Read our full guide: Planning for Long-Term Care Costs in the UK

Common Financial Planning Mistakes to Avoid

The tax year end is also a good time to reflect on habits and decisions that can quietly cost you money.

• Leaving everything in cash rather than using tax-efficient wrappers like ISAs and pensions
• Missing the ISA deadline and losing the annual allowance permanently
• Failing to claim pension tax relief that you are entitled to, particularly for higher rate taxpayers
• Ignoring CGT allowances when holding investments outside an ISA
• Not planning for care costs, which can significantly erode wealth in later life
• Overlooking Inheritance Tax implications of a growing estate
• Delaying important decisions until the last minute, leading to rushed choices
• Treating income protection as optional, when the consequences of losing your income without cover can be severe

How Professional Advice Can Help

Tax rules are not static. The allowances, thresholds and rates that apply today may look different in future years. Navigating these changes on your own is possible, but it takes time and expertise that most people understandably do not have.

A financial adviser can review your entire financial position, identify allowances you may be underusing, and put in place a plan that makes the most of what is available before each deadline. This is especially valuable if you have complex circumstances, such as multiple pension pots, self-employment income, investment portfolios outside ISAs, or significant assets that could attract Inheritance Tax.

The value of independent advice lies in objectivity. An independent adviser searches the whole market rather than recommending products from a restricted list. At Off Piste Wealth, we work with clients to build plans that are genuinely suited to their circumstances, not shaped by product preferences.

Frequently Asked Questions

What tax allowances should I use before the tax year ends?

The key allowances to use before 5 April 2026 include your £20,000 ISA allowance, your £60,000 pension annual allowance (or 100% of earnings if lower), the £3,000 Capital Gains Tax exempt amount, the £500 dividend allowance, and the £3,000 annual gifting exemption for Inheritance Tax purposes. Junior ISAs also have a £9,000 allowance per child. All of these are lost if not used before the deadline.

What happens if you do not use your ISA allowance?

Your ISA allowance resets on 6 April each year. Any unused portion from the previous tax year cannot be carried forward. Once the deadline passes, that year's allowance is gone permanently. Acting before 5 April ensures you use the full £20,000 allowance and give your money the maximum time to grow tax-efficiently.

How much can you contribute to a pension in the UK?

The annual allowance for pension contributions in 2025/26 is £60,000 or 100% of your earnings, whichever is lower. If you have not used your full allowance in the previous three tax years, you may be able to carry that forward and contribute more. Speak to a financial adviser to calculate what is available to you.

Should you invest an inheritance?

Receiving an inheritance can feel overwhelming, and it is sensible to take some time before making significant decisions. However, holding large sums in cash for an extended period carries the risk of inflation eroding their value. A structured investment approach, aligned with your personal goals, is generally more effective than leaving money in low-interest accounts long-term. Professional advice can help you decide what is right for your situation.

Ready to Review Your Finances Before 6 April?

If you would like help reviewing your tax allowances, pension contributions or investment strategy before the end of the tax year, we are here to help.

Off Piste Wealth is a London based independent financial adviser working with UK professionals and business owners. We can review your current position, identify where you may be leaving money on the table, and put a clear plan in place before the 5 April deadline.

Get in touch to arrange a financial planning review or book a free discovery call today.