Tax year end planning: key allowances to review before 5 April

TaxAllCompliance

5 Mar

As the end of the UK tax year approaches, now is the time to review your personal and company tax position. Several valuable allowances do not roll forward. If they are not used before 5 April, they are lost. Proactive year end planning can reduce tax exposure and create flexibility for the year ahead.

Dividend tax bands 2025–26

With the dividend allowance now £500, it is important to understand where your income falls within the 8.75 percent, 33.75 percent and 39.35 percent bands.

Reviewing your remaining basic rate band before 5 April can help you time dividend payments more efficiently.

Capital gains tax annual exemption

The CGT annual exempt amount has reduced in recent years.

If you are considering asset disposals or restructuring investments, reviewing potential gains before year end may allow you to utilise your allowance effectively.

Pension annual allowance and carry forward

Pension contributions remain one of the most tax efficient planning strategies available.

You should review:

your annual allowance
any unused allowance from the previous three tax years
the balance between personal and company contributions

This is particularly relevant for company directors and owner managed businesses.

Maximise ISA allowances

You can Invest up to £20,000 each tax year in a Stocks and Shares or Cash ISA (or combination of both) to protect income and gains from tax. (From April 2027 the annual maximum you can invest in a Cash ISA is £12,000 for individuals under 65).

Business Asset Disposal Relief (BADR)

BADR is available to those disposing of their personal business, partnership share, or shares in the company they work for where the qualifying conditions are met, subject to a lifetime limit of gains of £1m. From 6 April 2026, the rate of CGT for qualifying gains is increasing from 14% to 18%. Therefore, if you are planning to dispose of a qualifying asset, it could be beneficial to bring the transaction forward to maximise the relief.

Planning ahead for 2026–27

Year end is not just about closing one tax year. It is also an opportunity to plan for the next.

If you would like to review your position before 5 April and discuss your plans for 2026–27, the team at Sampson Fielding - London-based chartered accountants and business advisors - would be delighted to help. Please just email the team at info@sampsonfielding.co.uk

Aoife Waters

Aoife qualified as a Chartered Tax Adviser in 2019 at Grant Thornton working within the corporation tax team. Prior to this, she worked within the personal & trust tax team at Smith & Williamson and qualified with the ATT. Aoife has advised a wide range of companies from owner-managed businesses to large corporates on their tax affairs alongside their management team, across a number of sectors including technology, consumer, and retail. Aoife has a wide knowledge of corporate tax compliance, R&D tax credits and share schemes. She also enjoys working with individuals to help manage their personal tax position.