Every spring, the same question comes up for UK taxpayers: have you used everything the tax system gives you, before the year ends on 5 April? With dividend tax rates rising in 2026/27, allowances frozen until 2031, and cash ISA limits set to shrink in April 2027, the next twelve months are arguably the most important for personal tax planning in years.

This guide walks you through the key actions to consider before the 5 April 2026 deadline, and how to position yourself for the new 2026/27 tax year that begins on 6 April. All figures are based on the rates confirmed in the Autumn Budget 2025.

Why Year-End Tax Planning Matters

A few hours spent reviewing your finances before 5 April can save thousands of pounds. Most allowances reset at midnight on 5 April and cannot be rolled into the following year. Once they are gone, they are gone.

Two factors make planning unusually valuable this year:

• Dividend tax is going up. From 6 April 2026, basic rate dividend tax rises from 8.75% to 10.75%, and higher rate from 33.75% to 35.75%. Only the additional rate of 39.35% stays flat.
• Frozen thresholds keep dragging more people into higher bands. The personal allowance (£12,570) and the higher rate threshold (£50,270) remain frozen in England, Wales and Northern Ireland until April 2031. Wage growth alone is pushing more taxpayers into 40% territory each year.

The earlier you plan, the more options you have.

Understanding the UK Tax Year and Key Deadlines

The UK tax year runs from 6 April to 5 April the following year. The current 2025/26 year ends on 5 April 2026; the new 2026/27 year starts on 6 April 2026.

Key dates to keep on your calendar:

• 5 April 2026 – Last day to use your 2025/26 ISA, pension, CGT and gift allowances.
• 6 April 2026 – New tax year begins. New allowances reset and the higher dividend rates take effect.
• 31 July 2026 – Second self assessment payment on account due.
• 31 October 2026 – Paper self assessment return deadline for 2025/26.
• 31 January 2027 – Online self assessment filing deadline and balancing payment for 2025/26.

Missing any of these deadlines triggers penalties and interest, so add them to your calendar now.

1. Use Your ISA Allowance Before 5 April 2026

The ISA is still one of the most generous tax wrappers available. For the 2025/26 tax year, you can pay up to £20,000 into Individual Savings Accounts. All interest, dividends and capital gains earned inside an ISA are completely tax free, with no time limit and no upper cap on the eventual value.

Your annual ISA allowance does not roll over. If you do not use it by 5 April 2026, it is lost forever.

Two reasons to act early in 2026:

1. Dividends outside ISAs cost more from April 2026. Sheltering dividend-paying shares inside a stocks and shares ISA avoids the higher rates entirely.
2. The cash ISA limit is dropping in 2027. From 6 April 2027, savers under 65 will be limited to £12,000 per year in cash ISAs (the remaining £8,000 of the £20,000 allowance must go into a stocks and shares ISA, Lifetime ISA or innovative finance ISA). The 2026/27 tax year is your last chance to put a full £20,000 into cash if that suits you.

The Lifetime ISA allowance remains at £4,000 within the £20,000 total, with a 25% government bonus for eligible savers using the funds for a first home or retirement.

2. Maximise Your Pension Contributions

Pensions remain the single most tax-efficient way for higher earners to reduce their bill. The annual allowance for 2025/26 stays at £60,000, or 100% of UK relevant earnings if lower. Tax relief is given at your marginal rate, so a £10,000 contribution effectively costs a 40% taxpayer just £6,000.

Things to check before 5 April 2026:

• Carry forward. If you were a member of a registered pension scheme during the previous three tax years and did not use the full allowance, you may be able to carry forward unused allowance from 2022/23, 2023/24 and 2024/25.
• Tapered annual allowance. High earners with adjusted income above £260,000 may have a reduced annual allowance, tapering down to a minimum of £10,000.
• Money Purchase Annual Allowance. Anyone who has flexibly accessed a defined contribution pension is restricted to £10,000 per year.

Pension contributions can also reclaim a lost personal allowance if your adjusted net income falls between £100,000 and £125,140, where the personal allowance tapers away at a rate of £1 for every £2 earned.

3. Plan Around the New Dividend Tax Rates

The dividend allowance remains at £500 for both 2025/26 and 2026/27. Above that, however, rates change significantly:

For company directors who pay themselves through a salary and dividends combination, this changes the maths. The salary plus dividends model still beats taking everything as PAYE income (dividends are not subject to National Insurance), but the gap is narrower.

Sensible actions to consider:

• Bring forward dividends into 2025/26 where the company has distributable reserves and it is commercially appropriate to do so.
• Move dividend-paying investments inside an ISA or pension where they will be tax free.
• Review the salary and dividend mix with your accountant before April so the 2026/27 numbers are optimised from day one.

4. Use Your Capital Gains Tax Annual Exemption

The CGT annual exempt amount is fixed at £3,000 for individuals in 2025/26 and 2026/27 (£1,500 for most trustees). This is a significant cut from the £12,300 it stood at three years ago, and it does not roll forward.

CGT rates from 30 October 2024 onwards are:

• 18% for gains within the basic rate band
• 24% for gains in the higher and additional rate bands

A few practical strategies:

• Crystallise gains up to £3,000 each year by selling assets and immediately repurchasing them inside an ISA (a “Bed and ISA” transaction). This resets the base cost without crossing the tax threshold.
• Transfer assets between spouses. Inter-spouse transfers are CGT free, so you can effectively double the annual exemption to £6,000 per couple by sharing a disposal.
• Time disposals carefully. If you are close to the £3,000 limit, splitting a sale across 5 April lets you use two years of exemption.
• Offset losses. Realised capital losses can be carried forward indefinitely, provided they are reported to HMRC within four years.

Note that residential property disposals must be reported and the CGT paid within 60 days of completion.

5. Save for Children with a Junior ISA

The Junior ISA (JISA) limit for 2025/26 and 2026/27 is £9,000. All interest, dividends and growth inside the JISA is tax free, and the funds are locked away until the child turns 18, at which point the account converts into an adult ISA.

Useful points for parents and grandparents:

• Multiple family members can contribute, as long as the total stays within £9,000 per child per tax year.
• The child takes legal control at 16, but cannot withdraw funds until 18.
• A Junior SIPP can also be opened, with up to £2,880 of contributions per year topped up to £3,600 with basic rate tax relief.

The JISA allowance does not carry forward, so use it or lose it.

6. Claim the Marriage Allowance

If one spouse or civil partner earns less than the £12,570 personal allowance, they can transfer £1,260 of unused allowance to the higher earner, reducing their tax bill by up to £252 a year. The recipient must be a basic rate taxpayer (income below £50,270).

Marriage Allowance can be backdated by up to four tax years, meaning a successful claim in 2025/26 could potentially recover relief from 2021/22 onwards.

7. Reduce Tax Through Charitable Giving

Gift Aid lets registered charities claim 25p back from HMRC for every £1 you donate. If you pay tax above the basic rate, you can also claim back the difference between your highest rate and the 20% basic rate through your self assessment return.

A £1,000 Gift Aid donation by a 40% taxpayer:

• The charity receives £1,250 (your £1,000 plus £250 reclaimed).
• You can claim back a further £250 from HMRC, making the net cost £750.

Gift Aid donations also extend your basic rate band, which can reduce dividend tax and bring you back below the personal allowance taper if your income is between £100,000 and £125,140.

8. Plan for Inheritance Tax

The inheritance tax nil-rate band stays at £325,000 per person, and the residence nil-rate band stays at £175,000 where a main home passes to direct descendants. Both are now frozen until April 2031. A married couple or civil partnership can therefore pass on up to £1 million tax free if both allowances are fully used.

Practical IHT strategies before 5 April 2026:

• £3,000 annual gift exemption. You can give up to £3,000 each tax year free of IHT. Unused exemption from the previous tax year can be carried forward for one year only, so the maximum is £6,000.
• Small gifts. You can give up to £250 to as many different people as you wish, each tax year.
• Wedding gifts. £5,000 from each parent, £2,500 from grandparents, £1,000 from anyone else.
• Gifts out of surplus income. Regular gifts from genuine surplus income (not capital), made as part of normal expenditure, are immediately exempt with no upper limit. Keep clear records.
• Seven-year rule. Larger gifts become potentially exempt transfers, falling outside your estate if you survive seven years from the date of the gift. Taper relief applies to tax due on gifts made between three and seven years before death.

Also note two important changes:

• From 6 April 2026: Agricultural Property Relief and Business Property Relief at 100% are capped at £1 million per person, with 50% relief on the excess. The cap is now confirmed to remain until April 2031.
• From 6 April 2027: Most unused defined contribution pension funds will fall within the deceased’s estate for IHT purposes.

If your estate is potentially affected, professional advice is well worth the cost.

9. Keep Accurate Records

Good record keeping is the foundation of every tax planning decision. HMRC requires records to be kept for at least six years for businesses and self-employed individuals, and 22 months after the end of the tax year for most personal taxpayers (longer if you submit a return late).

Keep evidence of:

• Income (salary, dividends, rental, savings interest)
• Pension contributions and Gift Aid donations
• Capital gains, including original purchase costs and any improvements
• Allowances claimed (Marriage Allowance, Trading Allowance, Property Allowance)
• Gifts that may affect inheritance tax

Making Tax Digital for Income Tax begins phasing in from 6 April 2026 for sole traders and landlords with turnover above £50,000. Quarterly digital reporting is required, although the 31 January final filing deadline remains. Penalties for late submissions are being relaxed during the first year, but the new regime starts in earnest from April 2027.

10. When to Get Professional Tax Advice

Personal tax planning can save serious money, but UK tax law is complex and changes every year. Speak to a qualified accountant or tax adviser if you:

• Run a limited company and need to optimise salary and dividend
• Own rental property or are considering an SPV structure
• Have an estate likely to exceed £1 million
• Hold AIM shares or business assets affected by 2026 BPR changes
• Have foreign income, non-UK residence questions, or assets abroad
• Are approaching retirement and considering pension drawdown

A short consultation often pays for itself many times over, especially with the dividend rate rise, frozen thresholds and pension IHT changes all converging in the next 24 months.

Frequently Asked Questions

What is personal tax planning?

Personal tax planning is the legal use of allowances, reliefs and exemptions to reduce the amount of tax you pay over your lifetime. It covers income tax, capital gains tax, dividend tax, inheritance tax and pension tax relief.

When is the UK tax year-end deadline for 2026?

The 2025/26 UK tax year ends on 5 April 2026. Most personal allowances, including ISA, pension carry-forward and CGT exemption, must be used by midnight on that date.

How much can I put in an ISA in 2025/26 and 2026/27?

The ISA allowance is £20,000 per person for both 2025/26 and 2026/27. The Junior ISA limit is £9,000 and the Lifetime ISA allowance is £4,000 within the overall £20,000.

What is the dividend allowance for 2026/27?

The dividend allowance remains at £500 for 2026/27. Tax rates above the allowance rise to 10.75% (basic), 35.75% (higher) and 39.35% (additional rate, unchanged) from 6 April 2026.

What is the CGT annual exemption for 2026/27?

The Capital Gains Tax annual exempt amount is £3,000 for individuals (£1,500 for most trustees) for both 2025/26 and 2026/27.

What is the inheritance tax threshold in 2026?

The IHT nil-rate band is £325,000, with an additional residence nil-rate band of up to £175,000 if a main home passes to direct descendants. Both are frozen until April 2031.

How much can I contribute to my pension in 2025/26?

The annual allowance is £60,000 or 100% of UK relevant earnings, whichever is lower. Carry forward of unused allowance from the previous three tax years may be available.

Can I transfer my personal allowance to my spouse?

Yes. The Marriage Allowance lets a non-taxpayer transfer £1,260 of personal allowance to a basic rate spouse or civil partner, saving up to £252 a year. Claims can be backdated up to four tax years.

What happens if I miss the 5 April deadline?

You permanently lose any unused 2025/26 ISA, JISA and LISA allowance. CGT exemption and the £3,000 IHT gift exemption (with one year carry forward) are also forfeited. Pension allowances offer slightly more flexibility through the carry-forward rules.

Should I use an accountant for personal tax planning?

If your situation includes property, dividends, business ownership, large pension pots or potential IHT exposure, professional advice almost always pays for itself. Simpler tax affairs can often be handled with HMRC’s online tools and guidance.

Final Thoughts

The next few weeks before 5 April 2026 are particularly worth your time. With dividend rates climbing, allowances frozen, and major changes coming for pensions and ISAs in 2027, decisions made now could shape your finances for years.

If you would like a personalised review of your year-end tax position, our team can help you make the most of every allowance available before the deadline.

Get in touch with Target Accounting today to book a personal tax planning consultation.

This article is for general guidance only and does not constitute financial or tax advice. Tax rules can change and individual circumstances vary. Please consult a qualified tax adviser before making decisions. Information believed correct as of May 2026, based on the Autumn Budget 2025 and HMRC guidance for the 2026/27 tax year.