Tax Year End 2026: What to Review Before April 5th

As March progresses, many people begin searching for what they should consider before the tax year ends. The 5th of April is not a deadline to panic about, but it is a natural and useful financial checkpoint.

Most UK tax allowances operate on a use-within-the-tax-year basis. Once the 5th of April passes, unused allowances are generally lost. Reviewing your position before the end of the tax year allows decisions to be made calmly and deliberately, rather than in haste.

The focus is not on reacting. It is on ensuring nothing important is overlooked.

What to Consider Before April 5th 2026

Before the end of the 2025 to 2026 tax year, you may wish to review:

• Have you used your £20,000 ISA allowance if appropriate?

• Are pension contributions aligned with the £60,000 annual allowance?

• Have you reviewed capital gains against the annual exemption?

• Is dividend income within the £500 allowance?

• Are you aware of income levels near £50,000 or £100,000?

• Have you considered the £3,000 Inheritance Tax gifting exemption?

• Are you eligible for Marriage Allowance?

• If self-employed or a landlord, are you prepared for Making Tax Digital from April 2026?

  
  

Not every item will apply to every individual. The purpose of reviewing these areas is clarity, not urgency.

ISA Allowance - £20,000

Each individual can contribute up to £20,000 into ISAs during the 2025 to 2026 tax year. Growth and income within an ISA are generally free from UK Income Tax and Capital Gains Tax. Unused allowance does not roll forward.

For many savers, March is a sensible time to confirm whether ISA contributions remain consistent with broader financial goals. Contributing purely to avoid losing allowance may not always be appropriate. Affordability, emergency reserves and time horizon should all be considered.

Pension Annual Allowance - Up to £60,000

The standard pension annual allowance is currently £60,000. Carry forward from the previous three tax years may be available if unused allowance exists, subject to eligibility.

Pension contributions can provide tax relief, but they also reduce accessible capital. Before increasing funding, it is helpful to consider:

• Current and projected income

• Retirement timeline

• Existing pension provision

• Overall cashflow stability

The £100,000 to £125,140 Income Band

For individuals with income between £100,000 and £125,140, the Personal Allowance is gradually withdrawn. This creates an effective marginal tax rate of up to 60 percent within that band. The effect of this is that for every £100 of income between £100,000 and £125,140, an individual only gets to take £40 home - £40 is deducted in income tax, while another £20 is lost by the tapering of the personal allowance (i.e £50 of lost PA, taxed at 40%) which effectively amounts to a 60% tax rate on income within this range.

In some circumstances, pension contributions can reduce adjusted net income and help restore Personal Allowance. This is a technical area and should be approached with care, as individual circumstances vary.

Capital Gains Tax Annual Exemption

Each individual has an annual Capital Gains Tax exemption. Gains above this level may be taxable depending on circumstances.

Where asset sales are already being considered, completing transactions before the 5th of April may allow the annual exemption to be used efficiently. However, selling investments solely to use the exemption can disrupt long-term strategy and should be carefully evaluated.

Dividend Allowance - £500

The dividend allowance for the 2025 to 2026 tax year is £500. Dividend income above this level is taxed according to your income band.

Reviewing dividend income before the 5th of April can help avoid unexpected tax liabilities, particularly where investments generate income outside tax-efficient wrappers.

Marriage Allowance

Marriage Allowance enables a lower-earning spouse or civil partner to transfer up to £1,260 of their Personal Allowance to a basic rate taxpayer partner. This may reduce the household tax bill by up to £252.

Eligibility depends on income levels. A brief review before the 5th of April ensures that available relief is not missed.

Inheritance Tax Gifting - £3,000 Annual Exemption

Each individual may gift up to £3,000 per tax year without the gift forming part of their estate for Inheritance Tax purposes. If unused, this exemption can be carried forward for one tax year only.

For families considering intergenerational support, tax year end can be a practical moment to confirm whether gifting plans align with long-term intentions while maintaining personal financial security.

Junior ISAs

The Junior ISA allowance for the 2025 to 2026 tax year is £9,000 per child. Contributions are locked in until age 18.

For parents and grandparents, March often provides an opportunity to review whether children’s savings remain consistent with education or future support plans.

Making Tax Digital from April 2026

From April 2026, Making Tax Digital for Income Tax is expected to apply to self-employed individuals and landlords with qualifying income above £50,000.

Although this requirement formally begins in the next tax year, reviewing income levels and record-keeping systems now can help ensure a smoother transition.

Key Tax Year End Review Table

Area to Review	2025/26 Limit	Review Before 5 April?
ISA Allowance	£20,000	Yes
Pension Annual Allowance	Up to £60,000	Yes
Capital Gains Exemption	£3,000 (for individuals)	Yes
Dividend Allowance	£500	Yes
IHT Gifting	£3,000	Yes
Marriage Allowance	£1,260 transferable	Yes
Income Thresholds	£50k / £100k+	Yes

This table is not a prompt to act on every item. It is a reminder to review what may be relevant to you.

Important Dates

• 5 April 2026 - End of the 2025 to 2026 tax year

• 6 April 2026 - Start of the new tax year

Allowing sufficient time for transactions and contributions to be processed in late March can help avoid unnecessary operational pressure.

A Structured Approach to March Planning

Tax year end is not about reacting to a deadline. It is about ensuring your financial arrangements remain aligned with your objectives.

Some allowances may be relevant this year. Others may not. The value lies in understanding how each element fits within your broader financial plan.

At Oakmere Wealth, we focus on structured, long-term planning rather than isolated transactions. A considered review before the 5th of April can help ensure your strategy remains aligned with your goals, both now and in the years ahead.

If you would welcome clarity on how these allowances apply to your personal circumstances, we would be pleased to arrange a conversation.

Frequently Asked Questions: Tax Year End 2026

What happens if I do nothing before 5 April 2026?

If you take no action before 5 April 2026, you may lose access to certain tax allowances that operate on a “use it within the tax year” basis. This includes allowances such as the ISA allowance, Capital Gains Tax annual exemption, dividend allowance and Inheritance Tax gifting exemption.

While there is no requirement to act for action’s sake, reviewing your position before the tax year ends helps ensure that opportunities are not unintentionally missed.

Do unused ISA allowances roll over to the next tax year?

Unused ISA allowances do not roll over into the next tax year. The £20,000 ISA allowance for the 2025/26 tax year must be used by 5 April 2026 or it will be lost.

However, contributing to an ISA should always be aligned with your broader financial plan. It is important to consider affordability, emergency reserves and long-term objectives before making additional contributions.

How does the £60,000 pension annual allowance work in 2025/26?

The standard pension annual allowance for the 2025/26 tax year is £60,000. This represents the maximum amount that can typically be contributed across all pensions while still benefiting from tax relief.

In some cases, unused allowance from the previous three tax years may be carried forward, provided eligibility criteria are met. It is also important to note that high earners may be subject to tapered allowances, and those who have already accessed flexible pension benefits may be restricted by the Money Purchase Annual Allowance.

Because pensions reduce accessible capital, contributions should be considered carefully within the context of cashflow and retirement planning.

Why is income between £100,000 and £125,140 tax sensitive?

Income between £100,000 and £125,140 is significant because the Personal Allowance is gradually withdrawn within this band. For every £2 of income above £100,000, £1 of Personal Allowance is removed.

This creates an effective marginal tax rate of up to 60 percent. In certain circumstances, reducing adjusted net income may help restore some or all of the Personal Allowance. This area is technical and should always be reviewed in light of individual circumstances.

The effect of this is that for every £100 of income between £100,000 and £125,140, an individual only gets to take £40 home - £40 is deducted in income tax, while another £20 is lost by the tapering of the personal allowance (i.e £50 of lost PA, taxed at 40%) which effectively amounts to a 60% tax rate on income within this range.

What is the Capital Gains Tax annual exemption for 2025/26?

Each individual has an annual Capital Gains Tax exemption, which allows gains up to a specified level to be realised before tax becomes payable. Gains above this threshold may be taxable depending on income level and the type of asset disposed of.

Where asset sales are already being considered, reviewing gains before 5 April can allow

the exemption to be used efficiently. However, selling investments solely for tax reasons may disrupt long-term strategy and should be approached with care.

How does the £3,000 Inheritance Tax gifting exemption work?

Each individual may gift up to £3,000 per tax year without the gift forming part of their estate for Inheritance Tax purposes. If the exemption is unused in one tax year, it can generally be carried forward for one year only.

Gifting can be an effective part of intergenerational planning, but it should always be balanced against your own financial security and long-term needs.

What is the dividend allowance for the 2025/26 tax year?

The dividend allowance for the 2025/26 tax year is £500. Dividend income above this level is taxed according to your income tax band.

Reviewing dividend income before 5 April can help avoid unexpected tax liabilities, particularly where investments are held outside tax-efficient structures such as ISAs or pensions.

Who is eligible for Marriage Allowance?

Marriage Allowance allows a lower-earning spouse or civil partner to transfer up to £1,260 of their Personal Allowance to a basic rate taxpayer partner. This may reduce the household tax bill by up to £252 per year.

Eligibility depends on income levels and tax status. A review before the end of the tax year can ensure the relief is not overlooked.

What is Making Tax Digital and who will be affected in April 2026?

From April 2026, Making Tax Digital for Income Tax is expected to apply to self-employed individuals and landlords with qualifying income above £50,000.

Those approaching this threshold may wish to review income levels and accounting systems in advance to ensure they are prepared for digital reporting requirements.

When should tax year end planning begin?

Tax year end planning ideally begins well before March. Leaving decisions until the final days of the tax year can create unnecessary pressure and administrative delays.

A structured review in late winter allows time for contributions and transactions to be processed smoothly and ensures decisions are aligned with long-term financial objectives rather than short-term deadlines.

The value of an investment with St. James’s Place will be directly linked to the performance of the funds selected, and the value can therefore go down as well as up. You may get back less than you invested.

The levels and bases of taxation, and reliefs from taxation, can change at any time and are generally dependent on individual circumstances.

SJP approved: 27/03/2026