With the end of the 2025/26 tax year approaching, now can be a sensible time to review your personal finances and ensure key allowances are being used effectively.

This year, 5 April 2026 falls on Easter Sunday, meaning Thursday 2 April 2026 is effectively the last working day of the tax year. If you are planning to take action, leaving matters until the final days may limit your options.

Below are some of the main areas requiring review ahead of the tax year end.

Individual Savings Account (ISA) allowances

The maximum amount which can be added to an ISA for the 2025/26 tax year remains £20,000. Each eligible individual has their own allowance, but any unused ISA allowance cannot be carried forward.

ISAs allow investments and cash savings to grow free from income tax and capital gains tax, and there is no requirement to report ISA income or gains to HMRC. While ISA funds do form part of an individual’s estate for inheritance tax purposes, they can remain a highly efficient wrapper for long-term savings and investments.

Capital gains tax (CGT)

Selling investments such as funds or shares may give rise to capital gains tax. Each individual has a CGT annual exemption of £3,000 for the 2025/26 tax year.

Any gains above this level may be taxable, depending on your wider income and other gains in the same tax year. Capital losses must first be set against gains in the same year, with any unused losses available to carry forward for use against future gains.

For investments (excluding property), CGT rates currently stand at 18% for basic-rate taxpayers and 24% for higher-rate taxpayers. With allowances having reduced in recent years and rates having increased, reviewing your investment position before the tax year end can help ensure allowances are used where appropriate.

HMRC has also increased its focus on undeclared gains, making accurate reporting increasingly important.

Inheritance tax considerations

Each individual currently benefits from an inheritance tax (IHT) nil-rate band of £325,000, with amounts above this typically taxed at 40%.

In addition, the residence nil-rate band allows a further £175,000 (2025/26) to be passed on, subject to certain conditions being met.

Gifting can play a role in reducing the value of an estate over time. The annual gifting allowance is £3,000, with the ability to carry forward unused allowance from the previous year (up to £6,000 in total). Small gifts and wedding gifts may also be made within set limits.

Larger outright gifts may qualify as Potentially Exempt Transfers (PETs), becoming free of IHT once the donor has survived seven years.

Looking ahead, unused pension funds are currently expected to fall within the scope of inheritance tax from April 2027, making forward planning increasingly important for many families.

Pension contributions and allowances

For most individuals, the annual allowance for pension contributions remains £60,000 gross, covering personal, employer and third-party contributions. This allowance may be reduced for higher earners or where pension income has already been taken flexibly.

Personal contributions generally cannot exceed 100% of pensionable earnings, although employer contributions may be higher, subject to relevant rules. Individuals with no earned income can still contribute up to £3,600 gross and receive basic-rate tax relief, provided they are under age 75.

Pension carry forward

If you have fully used the current year’s annual allowance, it may be possible to use unused pension allowances from the previous three tax years, provided you held a pension arrangement during those years. The oldest unused allowance must be used first.

Pension lump sums and allowances

Although the lifetime allowance was abolished, tax-free cash is now capped under the Lump Sum Allowance, broadly limiting tax-free withdrawals to the lower of £268,275 or 25% of pension benefits, unless specific protections apply. You may be able to receive more tax free cash than this depending on any HMRC lifetime allowance protections which are still valid.

Defined benefit (final salary) pensions are included in these calculations, so advice can be particularly valuable when reviewing retirement plans.

Child benefit and income planning

Child benefit begins to be withdrawn once household income exceeds £60,000 and is fully withdrawn at £80,000. Pension contributions can reduce adjusted income, potentially helping to preserve some entitlement.

Income tax and personal allowance

Most individuals benefit from a personal allowance of £12,570, which is currently frozen until April 2031. Once income exceeds £100,000, this allowance gradually reduces, creating a higher effective tax rate. Income above £125,140 is taxed at 45%.

Savings interest and tax

Bank interest is paid gross, and individuals are responsible for declaring any tax due. With interest rates remaining elevated, reviewing savings income alongside other earnings can help avoid unexpected tax liabilities or unintended movement into a higher tax band.

Taking advice

Tax year end planning can be complex, particularly where multiple allowances interact. Professional advice can help ensure decisions are aligned with your wider financial objectives and remain appropriate as rules evolve.

To ensure you are making best use of available allowances before tax year end, please contact us on 0330 320 9280, email info@cravenstreetwealth.com or complete our online enquiry form.

 The content of this article is for information only and does not constitute formal financial advice. This material is for general information only and does not constitute investment, tax, legal or other forms of advice.

References to legislation and tax is based on our understanding of United Kingdom law and HM Revenue & Customs practice at the date of publication. These may be subject to change in the future. Tax rates and reliefs may be altered. The value of tax reliefs to the investor depends on their financial circumstances. No guarantees are given regarding the effectiveness of any arrangements entered into on the basis of these comments.

You should not rely on this information to make, or refrain from making any decisions. Always obtain independent, professional advice for your own particular situation.

Craven Street Financial Planning Limited is authorised and regulated by the Financial Conduct Authority (FCA). The FCA does not regulate tax advice.