Even with a full year to plan, it is common for tax planning decisions to be left until the final days of the tax year. Pension top ups, ISA contributions, and gifting can become reactive rather than deliberate, driven by deadlines rather than strategy.
If that sounds familiar, not to worry, there is still time to act. The weeks leading up to the 5th April provide the opportunity to get on top of your finances before allowances are reset and reliefs are lost for the year.
This article sets out the key areas to review before the end of the UK tax year and the steps you can take to make the most of the available allowances.
ISAs remain one of the most effective and flexible tax planning tools available in the UK.
For the 2025-26 tax year:
Unused ISA allowances cannot be carried forward. If they are not used by the 5th April each year, they are lost permanently.
With capital gains and dividend allowances now significantly reduced, holding investments inside ISAs has become increasingly valuable. Income and gains generated within an ISA do not count toward personal tax allowances and do not need to be reported to HMRC.
ISAs can usually be retained if you move abroad, subject to your provider, although new contributions are generally restricted once non-UK resident.
The annual pension allowance for 2025-26 is £60,000, subject to:
Where available, unused allowance from the previous three tax years may be carried forward, allowing for contributions well in excess of £60,000 in a single year. This can be particularly valuable following business sales, bonuses, or previous years of lower contributions.
Although the lifetime allowance has been abolished, limits remain on the amount that can be taken as tax free cash upon retirement. Pension contributions and withdrawal planning therefore still require careful consideration.
For those living abroad, tax relief on UK pension contributions is limited and depends on whether you remain eligible under UK rules, which can change over time and may be affected by factors such as how long you have been outside the UK, whether you have relevant UK earnings, and your ongoing connection to the UK tax system.
While it may still be possible to pay into a UK pension as a non-UK resident, the availability of tax relief is often restricted and should be reviewed carefully in the context of both UK rules and the tax treatment in your country of residence.
For the 2025-26 tax year:
These allowances have been reduced substantially over recent years.
Where appropriate, crystallising gains within the allowance and reinvesting proceeds into tax efficient structures such as ISAs or pensions may be considered as part of an approach to managing long term tax exposure. Transfers between spouses or civil partners can also affect the availability of allowances.
Even for those living abroad, UK capital gains rules may continue to apply to certain UK assets, such as UK property.
Inheritance tax (IHT) in the UK remains a key factor in tax planning, with a standard rate of 40% applied to the value of an estate exceeding the available tax-free thresholds.
Due to frozen thresholds and upcoming changes to reliefs and pension treatments, lifetime planning has become increasingly important to mitigate potential tax liabilities.
Each tax year, individuals may:
Gifts above these amounts may still fall outside the estate if the individual survives seven years, though this requires careful planning.
It is also important to be aware that from April 2027, unused pension funds are expected to fall within the scope of inheritance tax. Hence, it is important to review existing pension and estate planning strategies well in advance.
For UK citizens living abroad, UK inheritance tax exposure may still apply, particularly where domicile or deemed domicile rules are relevant, or if UK assets are involved.
Tax year end can also be a practical time to review how the younger generations maximise their taxes and longer-term finances.
Junior ISAs allow up to £9,000 per year per child, with funds becoming accessible at age 18. Growth and income remain tax free.
Junior pensions offer another option, allowing contributions of up to £2,880 per year, grossed up to £3,600 with tax relief. These funds are locked away until age 55 (rising to 57 in 2028), making them suitable only where long-term retirement provision is the goal.
Eligibility for the full new UK State Pension usually requires 35 qualifying National Insurance years, although some people may need more depending on their record.
Before the tax year ends, it is worth reviewing your NI record to identify any gaps. Voluntary contributions can usually be made to fill gaps from the previous six tax years, although transitional rules may extend this window in some cases.
This is particularly relevant for individuals who have spent time working overseas, as gaps can arise without being obvious.
Before the tax year closes, it is worth confirming:
Once the tax year ends, many of the available opportunities disappear.
If you would like a structured review of your tax, pension, and investment position before the 5th April, including where UK assets interact with Swiss residency, get in touch with us today and book your initial, no-cost and no-obligation meeting.
Send us an e-mail to contactus@pattersonmills.com or call us direct at +44 (0) 1908 503 741 and we shall be pleased to assist you.
Please note that all content within this article has been prepared for information purposes only. This article does not constitute financial, legal, or tax advice. Always ensure you speak to a regulated Financial Adviser before making any financial decisions.
