As the end of the tax year approaches, now is the ideal time to review your personal finances and make sure you’re making the most of the reliefs and allowances available.

With the personal allowance and key tax thresholds frozen until April 2031, many individuals are being pushed into higher tax bands - meaning year‑end planning is more important than ever.

Below, we set out the most effective steps you can take before 5 April to reduce your tax bill and set yourself up for a more efficient year ahead.

Make the most of your ISA allowance

Individual Savings Accounts (ISAs) remain one of the simplest and most tax‑efficient ways to save and invest. Returns within an ISA are free from Income Tax and Capital Gains Tax, and each adult currently has an annual allowance of £20,000, which will be the same in the coming tax year.

However, changes to ISA rules from 6 April 2027 will mean from that date there is a reduced cash ISA limit of £12,000 for those under 65 – the balance of £8,000 can only be used for stocks and shares ISAs. Reviewing your position now can help you secure maximum tax‑free returns before the changes take effect.

Importantly, unused ISA allowance cannot be carried forward. If you don’t use the annual allowance for a tax year by 5 April, it’s lost.

Families should also consider Junior ISA limits (£9,000 per child), which, like adult ISAs, must be used before 5 April or lost.

Maximise pension contributions - and carry forward if you can

Pension contributions provide some of the most valuable tax reliefs available.

The annual allowance remains at £60,000 for 2025/26 - in most cases, contributions made up to that level receive full tax relief at your marginal tax rate. You might be able to boost your contributions further using unused allowance from the three previous tax years, as long as you were a member of a registered pension scheme in those years.

However, watch out as this limit applies to the amount of grossed up contributions. For higher earners the limit is also reduced. This potentially applies to those with income of over £200,000 - the rules can reduce the annual allowance to as little as £10,000, depending on income levels. 

The amount taxpayers can contribute each year is also restricted to the higher of “net relevant earnings” (i.e. earned income) or £3,600. 

For higher earners, pension contributions can also reduce adjusted net income, helping to:

• Avoid the 60% effective tax rate (67.5% in Scotland) that arises when income exceeds £100,000 and the personal allowance tapers.
• Reduce exposure to the High-Income Child Benefit Charge, which can affect those earning over £60,000.
• Maintain eligibility for tax‑free childcare.

Finally, with changes to the IHT treatment of unused pension funds coming in from April 2027, now is a good time to revisit long‑term planning around how pensions fit into your wider estate strategy. The new rules will mean many people will have a significantly higher exposure to IHT.

Review Gift Aid donations to boost tax efficiency

Gift Aid can be a surprisingly effective tax planning tool. Higher and additional rate taxpayers can claim extra tax relief on their donations - a benefit that many miss.

A donation made between 6 April 2026 and 31 January 2027 can, in certain cases, be treated as if made in 2025/26, enabling flexibility to align the relief with a more favourable tax year. Strict conditions apply, so forward planning is essential.

Donations made under Gift Aid reduce your adjusted net income, which can help preserve your Personal Allowance and reduce or eliminate the High-Income Child Benefit Charge.

Check allowances available across the household

Reviewing your position at a household level can unlock further efficiencies:

• Spouses can consider passing income‑generating assets to maximise use of the tax rates and bands, as well as the personal allowance, savings allowance and dividend allowance.
• Couples may benefit from the Marriage Allowance, where eligible.

Smart allocation of savings and investments between family members can significantly reduce overall tax exposure, although there are important tax rules that can come into play and other considerations with passing on assets than just the potential tax savings.

Timing dividends and other income

For some sources of income it is possible to decide when payments are made, such as dividends or bonuses from personal companies, or distributions made from family trusts to beneficiaries. Careful planning can allow you to:

• Maximise your tax rates and bands.
• Utilise allowances, or prevent the restriction of the personal allowance.
• Take action before rises in tax rates. For example dividend rates increase from 8.75% to 10.75% for basic-rate taxpayers and 33.75% to 35.75% for higher-rate taxpayers on 6 April 2026. Dividends paid a few days before that date may be subject to a lower rate than those paid afterwards.

Making Tax Digital

New rules apply on digital record-keeping and quarterly reporting for certain taxpayers from 6 April. This is where gross income (before expenses) from self-employment or property exceeds £50,000. The rules are complicated, so get in touch with us to discuss how they might affect you.

How we can help

Everyone’s circumstances are different, and the right approach will depend on your wider financial picture. If you’d like tailored advice on how to make the most of the allowances and reliefs available before 5 April, our Tax team would be happy to help.

We have further information available in our Tax Planning Guide.

Get in touch with a member of our Private Client Tax team today by filling out the short form below.