On 5 April 2026, the current tax year will end, and the new one will start the following day. Making a note of the deadline in your calendar could help you make the most of tax breaks as part of your financial plan.
Here’s why the start of a new tax year might matter to you.
1. 5 April 2026 may be your last opportunity to use 2025/26 allowances
When a tax year ends, many allowances reset. Consequently, the coming weeks might be your last chance to use some of them.
For example, you can add up to £20,000 into ISAs in 2025/26. ISAs provide a tax-efficient way to save or invest, which might reduce your overall tax liability. You cannot carry forward your unused ISA allowance, so 5 April 2026 might be your last opportunity to use the 2025/26 allowance.
In some cases, you are able to carry forward unused allowances, but they still have a date by which you must use them.
The annual exemption allows you to pass on up to £3,000 without worrying that it may be included in your estate when calculating Inheritance Tax (IHT). So, if your estate could be liable for IHT, it may provide a valuable way to pass on some of your wealth now.
You can carry forward any unused allowance for one tax year. As a result, this may be your last chance to use your 2024/25 allowance if you haven’t already done so.
Arranging a meeting with your financial planner can help you understand how you’ve used allowances and exemptions so far this year. It could also identify other opportunities that may make sense as part of your wider financial plan.
2. You can make a tax-efficient strategy for 2026/27
Planning how you’ll use allowances and exemptions throughout the year, rather than waiting until the deadline approaches, might be useful.
The pension Annual Allowance is the maximum amount you can contribute to your pension during the tax year while still receiving tax relief without incurring an additional charge. It covers contributions made by you, your employer, and any third parties. You can only claim tax relief up to 100% of your annual earnings.
For the 2026/27 tax year, the pension Annual Allowance is £60,000 for most people.
Deciding how much you want to contribute in 2026/27, and making monthly contributions, could be easier to manage than discovering a shortfall at the end of the tax year and needing to contribute an additional lump sum.
It’s also important to note that some allowances and tax rates will change in the new tax year.
For instance, from 6 April 2026, the basic and higher rates of Dividend Tax will both increase by two percentage points, which may affect business owners and investors. Being aware of these changes could influence the financial decisions you make now.
In some cases, you might benefit from looking even further ahead.
The ISA allowance is set to change for under-65s on 6 April 2027. While adults will still have a £20,000 ISA allowance, only £12,000 can be placed in a Cash ISA each tax year, with the remaining £8,000 reserved for investments. You’ll still be able to contribute the full ISA allowance into an investment account if you choose to.
With this in mind, you might change how you use your ISA allowance in 2026/27.
Contact us if you have questions about your tax strategy
It can be difficult to keep up with tax changes and understand what they mean for you. If you have any questions about your tax strategy for the current tax year and beyond, please get in touch. We can help you make the most of allowances and exemptions to improve your tax efficiency.
Please note:
This article is for general information only and does not constitute advice. The information is aimed at individuals only.
All information is correct at the time of writing and is subject to change in the future.
Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
The Financial Conduct Authority does not regulate tax planning.