On 5 April 2025, the current tax year will end, and a new one will begin the following day. Making a note of this deadline in your calendar is an important part of effective tax year-end planning, helping you make the most of available allowances and tax-efficient opportunities before they reset.
Here’s why acting before the deadline could make a meaningful difference to your financial plan.
5 April 2025 May Be Your Last Chance to Use 2025/26 Allowances
One of the key benefits of proactive tax year-end planning is ensuring you don’t lose valuable allowances when the tax year closes.
For example, you can contribute up to £20,000 into ISAs during the 2025/26 tax year. ISAs offer a tax-efficient way to save or invest, potentially reducing your overall tax liability. However, you cannot carry forward unused ISA allowance, meaning 5 April 2026 is your final opportunity to use this year’s entitlement.
Other allowances do allow a limited carry forward. The annual gift exemption, for instance, lets you pass on up to £3,000 without it being included in your estate for Inheritance Tax (IHT) purposes. If unused, you can carry this forward for one tax year only – meaning this may be your last chance to use your 2024/25 exemption.
Reviewing how you’ve used your allowances so far is a central part of effective tax year end planning, and a financial planner can help identify any remaining opportunities before the deadline passes.
Plan Ahead for 2026/27
While the weeks leading up to 5 April are important, strong tax year end planning also involves preparing for the year ahead.
The pension Annual Allowance – the maximum you can contribute while still receiving tax relief without an additional charge – will remain £60,000 for most people in 2026/27. This includes contributions made by you, your employer, or third parties. You can claim tax relief on contributions up to 100% of your annual earnings.
Rather than waiting until the end of the next tax year and potentially facing a shortfall, planning contributions in advance – perhaps through regular monthly payments – may make your strategy more manageable and consistent.
It’s also important to stay aware of upcoming tax changes. From 6 April 2026, the basic and higher rates of Dividend Tax will increase by two percentage points, which may affect investors and business owners. Factoring these changes into your decisions now can help improve overall tax efficiency.
Looking forward ahead, changes to ISA rules are expected from April 2027. While the overall £20,000 allowance will remain, limits on how much can be placed into a Cash ISA will apply for under 65’s. Understanding the future adjustments may influence how you structure your savings in 2026/27.
Speak to Us About Your Tax Strategy
Keeping up with allowances, deadlines and legislative changes can be challenging. Thoughtful tax year end planning ensures you make the most of current opportunities while preparing for the year ahead.
If you have questions about your tax strategy before 5 April, or would like support planning for 2026/27 and beyond, please get in touch. We can help you use allowances and exemptions effectively as part of your wider financial plan.
Please note: This article is for general information only and does not constitute advice. The information is aimed at individuals only.
All information is correct at the time of writing and is subject to change in the future.
Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
The Financial Conduct Authority does not regulate tax planning.
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