What UK Investors and Savers Should Review Before the End of the Tax Year
As the UK tax year draws to a close on 5 April, it’s a critical window for investors and savers to review their finances and take advantage of available allowances. Missing these opportunities can mean paying more tax than necessary or losing valuable reliefs that don’t roll over. Here’s a comprehensive guide to what you should be checking before the deadline.
1. Maximise Your ISA Allowance
Each individual has an annual ISA allowance (£20,000 for the 2025/26 tax year). Any unused portion is lost once the tax year ends.
- Consider topping up your Stocks & Shares ISA or Cash ISA.
- Review whether your current ISA mix aligns with your risk tolerance and goals.
- If you have large cash holdings, evaluate whether shifting some into investments could improve long-term returns.
2. Use Your Capital Gains Tax (CGT) Allowance
The CGT annual exemption is relatively small compared to previous years (£3,000), making it more important than ever to use it efficiently.
- Review investments held outside tax wrappers.
- Consider selling assets to realise gains up to the allowance.
- If appropriate, repurchase investments within an ISA (“Bed and ISA” strategy) to shelter future gains.
3. Top Up Pension Contributions
Pension contributions remain one of the most tax efficient ways to save.
- Annual allowance is typically £60,000 (subject to income limits and tapering).
- Contributions receive tax relief at your marginal rate.
- Carry forward rules may allow you to use unused allowances from the past three years.
This can be especially valuable for higher-rate taxpayers looking to reduce their taxable income.
4. Check Your Personal Allowance and Income Thresholds
Your Personal Allowance (£12,570) may be reduced if your income exceeds £100,000.
- Consider pension contributions or charitable donations to reduce taxable income.
- Salary sacrifice schemes can also help keep income below key thresholds.
5. Make Use of Dividend Allowance
The dividend allowance is now quite limited (£500), so planning matters.
- Review dividend income from shares or funds held outside ISAs.
- Consider shifting income-generating assets into tax-efficient wrappers.
6. Consider Gifting and Inheritance Tax Planning
The end of the tax year is a good time to review gifting strategies:
- You can gift up to £3,000 per year free of inheritance tax.
- Unused allowance from the previous year can be carried forward (one year only).
- Regular gifts from surplus income may also be exempt.
Keeping records is essential to ensure these gifts are properly documented.
7. Review Junior Accounts and Family Planning
- Junior ISAs have a separate allowance (£9,000).
- Contributions can help build long-term wealth for children tax-efficiently.
- Consider whether income or gains could be distributed across family members to utilise allowances.
8. Harvest Losses to Offset Gains
If you’ve made gains during the year:
- Realising losses can offset gains and reduce your CGT liability.
- Losses can also be carried forward for future years.
This is particularly useful in volatile markets.
9. Check Savings Interest and Personal Savings Allowance
Depending on your tax band:
- Basic-rate taxpayers: £1,000 allowance
- Higher-rate taxpayers: £500 allowance
- Additional-rate taxpayers: no allowance
If you’re close to exceeding your allowance:
- Consider moving funds into ISAs
- Or spreading savings across accounts
10. Review Portfolio Allocation and Strategy
Tax planning shouldn’t be done in isolation.
- Ensure your asset allocation still matches your long-term goals.
- Rebalance if necessary.
- Avoid making purely tax-driven decisions that don’t align with your investment strategy.
Final Thoughts
The weeks leading up to the end of the tax year are one of the most valuable opportunities for proactive financial planning. Even small adjustments, using allowances, shifting investments, or topping up pensions can lead to meaningful long-term benefits.
If your situation is complex, it may be worth consulting a financial adviser or tax specialist to ensure you’re making the most of available reliefs while staying aligned with your broader financial goals.
