Guide to Year-End Tax Planning 2025/26: How to Maximise Savings and Minimise Liabilities

March 12, 2026

With the 5 April deadline approaching, many individuals overlook valuable opportunities to arrange their finances more tax-efficiently. This guide covers the key areas of year-end tax planning — from pension contributions and ISA allowances to Capital Gains Tax strategy and Inheritance Tax gifting.

As the 5 April deadline approaches, many individuals overlook valuable opportunities to arrange their finances more tax-efficiently. From making the most of your pension and ISA allowances, to strategic planning for Capital Gains Tax and Inheritance Tax, the actions you take now can have a material impact on your overall wealth.

The end of the tax year is a critical date. Many allowances, reliefs and exemptions are time-sensitive. Once 5 April passes, that year's opportunities are often gone permanently. Taking proactive steps now can make a substantial positive difference.

Understanding the Foundations of Tax Planning

Effective tax planning is not about avoidance. It is the legitimate process of arranging your financial affairs to make use of what the law already permits. The principles centre on a few core actions: maximising contributions to tax-efficient savings vehicles, strategically crystallising gains or losses, and utilising annual exemptions.

Your personal tax circumstances are unique. A higher rate taxpayer benefits differently from pension contributions than a basic rate taxpayer. An individual with a portfolio of investments outside an ISA or pension faces different priorities from someone whose wealth is primarily in property. For this reason, seeking professional guidance is essential.

Maximising Your Pension Contributions

Pensions remain one of the most tax-efficient ways to save for retirement. When you contribute to a personal pension, the government provides tax relief that effectively boosts your savings. For a basic rate taxpayer, an £80 personal contribution is topped up to £100. Higher rate taxpayers can claim further relief through self-assessment, reducing the net cost even further.

The annual allowance for total pension contributions in 2025/26 is £60,000. Your own tax-relievable contributions are capped at the lower of £60,000 or 100% of your relevant UK earnings (or £3,600 if you have low or no earnings). If you have not used your full allowance in previous years, you may be able to carry forward unused amounts from the last three tax years — a particularly valuable option if you are looking to make a significant top-up contribution before 5 April.

Considerations for High Earners

For those with a high income, the rules surrounding the annual allowance become more complex. The Tapered Annual Allowance may reduce the standard £60,000 limit significantly. It is also important to be aware of the Lump Sum Allowance and the Lump Sum and Death Benefit Allowance, which set the maximum tax-free lump sums that can be taken from your pension. A financial adviser can clarify how these complex rules apply to your specific circumstances.

Utilising Your ISA Allowances

Individual Savings Accounts (ISAs) are a cornerstone of tax-efficient saving and investing in the UK. The £20,000 allowance can be split across different types of ISA — a Cash ISA, a Stocks and Shares ISA or an Innovative Finance ISA — depending on your risk appetite and financial goals.

Even if you are unsure about your long-term investment strategy, securing your ISA allowance before the deadline is prudent. Once the tax year closes, the opportunity is permanently lost. Junior ISAs are also available for children under 18, with a separate allowance of £9,000 for 2025/26.

Strategic Use of ISAs for Couples

An effective strategy for couples is to ensure both partners maximise their individual ISA allowances. Over time, this combined approach can shelter a significant amount of capital from tax. It is possible to transfer assets between spouses or registered civil partners without triggering Capital Gains Tax, allowing one partner to transfer funds to the other so they can use their ISA allowance.

For those with substantial investment portfolios held outside a tax-efficient wrapper, a process known as Bed and ISA is worth considering. This involves selling existing investments and repurchasing them within an ISA to protect future growth from tax. This must be managed carefully to comply with CGT rules, and professional advice is strongly recommended.

Capital Gains Tax: Strategic Planning

Capital Gains Tax is payable on the profit you make when you sell or dispose of an asset that has increased in value — including shares, investment properties or personal possessions worth more than £3,000. With the annual CGT exemption now at just £3,000, proactive management of your investment gains is more important than ever.

If you have assets showing a profit, consider whether to crystallise some of those gains before 5 April. If repeated each year, this strategy can manage portfolio growth in a highly tax-efficient way. For couples, there is an additional layer of planning available: assets can be transferred between partners on a no gain, no loss basis, potentially allowing both partners to use their £3,000 exemptions — realising up to £6,000 of gains tax-free.

Managing Gains and Losses

A key part of CGT planning involves balancing gains and losses. If you have realised gains that exceed the annual exemption, you can offset them by selling assets that are currently standing at a loss. These capital losses must be registered with HMRC to be usable — either in the current tax year or carried forward to offset future gains. This process requires careful timing and calculation.

Given the complexity and the significant sums that can be involved, consulting a financial adviser before making decisions in this area is strongly recommended.

Inheritance Tax: Gifting and Allowances

Inheritance Tax is payable on estates valued above the nil rate band, which remains at £325,000 and has been frozen at this level until 2031. Planning can significantly reduce the potential IHT liability for your beneficiaries.

The annual gifting exemption is one of the most accessible tools available. Each individual can gift up to £3,000 per tax year, free of IHT, and that gift immediately leaves the estate. Unused allowance from last year can be carried forward once. Couples can each use their own allowance, potentially gifting £12,000 combined if both years' allowances are available. In addition, unlimited small gifts of up to £250 per person per year can be made to as many individuals as you like.

More Complex Gifting Strategies

Beyond annual exemptions, you can make larger gifts known as Potentially Exempt Transfers (PETs). These gifts will be fully exempt from IHT if you survive for seven years after making them. If you pass away during this period, taper relief may reduce the tax due if the gift exceeds the nil rate band. This underscores the importance of making larger gifts sooner rather than later — the seven-year clock starts from the date the gift is made.

Another valuable but underused exemption is gifts out of normal expenditure. If you can demonstrate that you are making regular gifts from your surplus income and that these gifts do not affect your standard of living, they can be immediately exempt from IHT. This requires meticulous record-keeping to prove the pattern of gifting and affordability. Given the significant sums and long-term implications of IHT planning, seeking professional advice is essential.

Charitable Donations and Tax Relief

Making donations to registered charities is not only a way to support causes you care about — it can also be highly tax-efficient. For higher and additional rate taxpayers, the savings can be substantial. On a £100 donation (gross donation of £125 with Gift Aid), a higher rate taxpayer can reclaim £25 through their self-assessment tax return.

You can also elect to treat a donation made in the current tax year as if it were made in the prior year — useful if you had higher income previously and would benefit more from the relief then. Furthermore, you can donate certain listed shares and securities to charity and receive Income Tax relief on the full market value, in addition to being exempt from Capital Gains Tax. This is a specialist area where professional advice can help you structure your philanthropy in the most effective way.

Final Checks Before the Tax Year End

As 5 April approaches, a final review of your finances can help you avoid missing key opportunities. Work through this checklist:

• Have you used your full ISA allowance? The £20,000 cannot be carried forward — it is lost if unused by midnight on 5 April 2026
• Have you maximised your pension contributions? Consider available carry-forward allowances from the previous three tax years
• Review your investment portfolio: Are there gains you could realise within the £3,000 CGT exemption? Are there losses you could crystallise to offset other gains?
• Review gifts made during the year: Ensure they fall within the relevant IHT exemptions and that records are in order
• Check your charitable donations: Ensure Gift Aid has been applied correctly and records are ready for your self-assessment return
• Consider your self-assessment return: Ensure all higher rate pension relief and Gift Aid claims are captured

Do not leave this review until the last minute. Acting now gives you time to implement any advice properly and without time pressure.

Get in touch with Off Piste Wealth to arrange your year-end financial planning review, or book a free discovery call today.