If last year is anything to go by, this year is going to fly by, and as such, we wanted to remind you of some key planning points to take care of in advance of the 5th April, and also highlight some of the changes in the Budget which are planned to take effect from 6th April.
Basic Planning Points – the usual reminders
- ISA allowances – your annual ISA allowance is use-it-or-lose-it, and any unused portion cannot be carried forward. Remember if you have withdrawn from an ISA this year, you have until the 5th April to pay it back!
- Pension contributions – contributions provide valuable tax relief and can help reduce your taxable income. There are no major changes slated to pension contributions until 6th April 2029 (a big change is coming regarding salary sacrifice contributions), so take advantage whilst you can. Once we know more about the future plans, we will be in touch.
- Capital gains allowances – everyone has a basic tax free allowance of £3,000, but anything above that will be taxable.
- Inheritance tax gifting allowances – making gifts, coupled with bigger IHT planning ideas, can help reduce the value of your estate over time
- Tax Relief on VCTs – this is reducing from 30% to 20% from the 6th April, so this is the last year to take advantage of the higher tax relief.
A note on recent Budget changes
- The most recent Budget confirmed that personal tax allowances remain frozen until at least 2031, which in real terms can mean more people paying higher levels of tax as incomes rise.
- Dividend tax rates will increase by 2% from April 2026 and savings and property income tax rates are due to rise by 2% from April 2027.
- From 6th April 2026 the tax free relief on qualifying business and agricultural assets is now limited to 100% on the first £2.5 million (this has been increased from the £1 million originally mentioned in the Budget) and then 50% on anything above that – effectively giving a 20% IHT charge on the excess value
- And remember that from April 2027, pensions will form part of your Estate for IHT purposes.
This makes proactive planning particularly important to ensure you’re making the most of the allowances that are still available and to try to alleviate the implication of future changes.
We’ll continue to be in touch as usual but if you want to discuss any end-of-year planning (or anything else!) please give us a shout, we’d be very happy to help.
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