Personal Tax Planning Opportunities

As we approach another 5 April tax year end, we turn our thoughts to tax planning and some of the opportunities to be considered before then.

The list below, and our Tax Planning Guide linked here and at the end, is not exhaustive; however, it is a good starting point.

Pension Contributions

• Higher earning taxpayers may now benefit from the full £60k annual allowance.
• Against that, a number of taxpayers with income in excess of £260k may be restricted to relief on just £10k.
• Excess contributions attract an income tax charge. Although there are potential elections that could be made, there are very tight time constraints for these, so action must be taken fast to apply for these.

All in all, tax relief on pension contributions is very costly to the Exchequer. It is very valuable to the pension saver with income tax relief available at top rates of tax. There remains the risk that the Chancellor might curtail this relief in future. We have already seen it announced that from April 2027 pension funds will be liable to Inheritance Tax.

Where applicable and practical to do so, look to utilise unused annual pension contribution allowances from the 2022/23 tax year before they are lost after 5 April 2026.

Managing Income Levels Tax-Efficiently (2025/26)

Pension savings and gift aid donations can produce particularly significant tax savings for those:

• With income over £60k, to avoid the high income child benefit clawback charge and reduce exposure to the higher income tax rate.
• With income over £100k, to preserve the income tax-free personal allowance in full and
• With income over £125,140, to avoid the additional income tax rate.

These limits have been frozen for a number of tax years now, and will not be increasing until April 2028.

Capital Gains Tax (CGT)

The tax free limit on taxable gains remains at £3,000 per annum. Current rates of CGT are 18% for gains chargeable at the basic rate and 24% for gains chargeable at the higher rates of tax. If you have gains arising in the current tax year consider crystalising losses to utilise against your gains. If you have not used your £3,000 annual exemption consider crystalising a gain up to this limit.

For gains qualifying for Business Asset Disposal Relief (BADR), the rates increase from 14% to 18% from 6 April 2026. Whilst the rate is soon to be in line with the CGT basic rate, it is still beneficial to plan asset sales qualifying for BADR carefully to take advantage of the lower rate.

Inheritance Tax (IHT)

With many recent changes to IHT, it is recommended you make use of your £3,000 annual gift allowance, or £6,000 if you have not used the prior years gift allowance, where possible, whilst it is still available.

If you have excess income there is a extremely valuable relief for making regular gifts out of surplus income which are exempt from IHT. This relief is potentially without limit but certain conditions have to be met.

Further information can be found HERE

Tax Efficient End of Tax Year Remuneration Planning

Ensuring the extraction of monies/profits from a personal limited company is taken as tax efficiently as possible, by way of salary, dividends, interest and/or pension contributions, utilising available annual allowances, reliefs and lower tax rates, where applicable. From April 2026, dividend tax rates are increasing by 2% for basic and higher-rate taxpayers above the £500 dividend allowance, while the additional-rate remains unchanged.

From April 2027, savings interest are subject to a 2% increase across all income tax bands, with the Personal Savings Allowance remaining unchanged. With the changes in mind, remuneration planning should be revisited to ensure profits are extracted as tax efficiently as possible.

ISAs shelter shares from both Income Tax and CGT. You may want to consider moving shares into ISAs within your £20k ISA subscription limit and utilising your £3,000 CGT exemption before 5 April 2026. While banks are paying interest on savings, utilising your annual ISA subscription continues to be a tax efficient tool.

Click here to view our Tax Planning Guide

Get In Touch

For more information or advice on Tax Planning opportunities available to you, contact your local Whitings LLP office or your usual Whitings contact today.

Disclaimer - All information in this post was correct at time of writing.