Start the New Year Strong: Year-End Tax Actions That Matter

As we enter a new calendar year, and many of us are thinking about resolutions and starting the year off right, it could be a good moment to think about your tax position. It’s a good time to take stock of your situation and ensure you are prepared for the tax year end, making the most of your allowances and in the best position come April. 

Know your timeline

It is often good to start with the basics. The UK tax year runs from 6 April to 5 April. The last UK tax year started on 6 April 2024 and ended on 5 April 2025. The current tax year started on 6 April 2025 and will run until 5 April 2026. So the start of the year is a good moment to check where you stand and make use of allowances before they expire.

Use your ISA Allowance

You can pay up to £20,000 into ISAs in the 2025/2026 and 2026/2027 tax year. You can open and pay into more than one ISA up to the limit, and this applies to cash, stocks and shares, innovative finance and, where eligible, Lifetime ISAs. Income, dividends and gains inside an ISA are not subject to capital gains tax (CGT) so it could be a good idea to use your allowance, especially if you are a higher rate tax payer. Additionally no income tax is due on any interest or dividends received within an ISA. 

It is also important to note that as you think longer term, the cash ISA limit is set to change from April 2027. From 6 April 2027, the allowance for cash ISAs will reduce to £12,000 for under 65s.¹ This limit only applies to cash ISAs but will have associated regulations to ensure no transfers from stocks and shares and Innovative Finance ISAs to cash ISAs, and tests to determine if an investment is eligible to be held in stocks and shares ISAs or is ‘cash like’. Speak to you planner if you would like to know more about this change and how it might affect your plan. 

Pensions contributions, carry forward and high earner taper

Now is a good moment to check how much you have paid into your pension this tax year, and see if there is an opportunity to boost your retirement savings. For most people the pension annual allowance (the maximum amount you save in your pension pot before you have to pay tax) is £60,000.² If you have a high income or have flexibly accessed your pension pot your allowance may be lower, and employer contributions count towards the same annual allowance.

Another opportunity could be available to you if you have unused allowance from the previous three tax years. You are able to carry this forward to increase what you can pay this year. However, you must have been a member of a registered scheme in those earlier years to be eligible. As this is a technical area, if you think this might be relevant to you, it would be a good idea to speak to speak to your planner for more advice.

Note that if you are deemed to be a high earner, where threshold income is above £200,000 and adjusted income is above £260,000, your allowance may be tapered. The allowance reduces by £1 for every £2 over the adjusted income limit, to a minimum of £10,000.³

Capital Gains Tax (CGT)

The capital gains annual exempt amount for individuals is £3,000 in 2025 to 2026. If you expect gains, you might want consider whether splitting these across tax years could help use two sets of exemptions, however this can be tricky and you may wish to discuss this strategy with your planner. 
The current individual CGT rates are 18 percent and 24 percent on gains over the £3,000 exemption, having increased in recent years. Always check your position and how losses and reliefs interact before selling.

Gifting and Inheritance Tax (IHT)

Gifting may have occupied a lot of brain space recently, but is still something worth considering as you look towards the tax year end. This is especially important if you are trying to manage your IHT bill. Each individual can gift up to £3,000 per tax year without it being added to the value of their estate for IHT purposes. If this goes unused, it can be carried forward one year, meaning you could gift £6000 in one year. The small gifts exemption allows gifts of up to £250 per recipient each tax year. And you can also give away as much of your income as you would like, provided that it meets the categories to be deemed as a “gift from surplus income”: 

These gifts are exempt from IHT. However, it is imperative that you keep a clear record of what income you are gifting. If you wish to make a larger lump sum gift, this can also be exempt from IHT separately to these rules, provided you live for at least seven years after making the gift.

Additional allowances to be aware of

Below are several other allowances you may be able to take advantage of. Check with your planner if you would like more details. 

Speak to your planner

If you would like help making the most of this year’s allowances, or you want to plan ahead for the new tax year, please contact your financial planner and schedule a review meeting. A short conversation now can make a meaningful difference at tax year end.

This article is designed to provide you with information only. It is not designed to provide you with financial advice. Please seek financial advice if you are still unsure about your options. There may be a charge for this. Remember, tax treatment depends on your individual circumstances and may be subject to change in the future. And the value of investments can go down as well as up, and could be worth less than what was paid in. This information is based on our understanding in December 2025. Aberdeen is not responsible for the information, accuracy and views of external sources.