Last-minute tips to take advantage of tax allowances before 5 April

With the end of the UK tax year falling on 5 April 2026, households and business owners have a valuable window to review their finances and make full use of available tax allowances. Many reliefs operate on a “use it or lose it” basis, meaning that failure to act before the deadline could result in missed opportunities.

Here is a practical guide to the key areas to consider before the tax year closes.

Use Your ISA Allowance

Every adult has an annual Individual Savings Account (ISA) allowance (£20,000 in the current tax year). Any interest, dividends or capital gains generated within an ISA are free from income tax and capital gains tax.

Also useful to note that parents and grandparents can contribute up to £9,000 into a junior ISA per child each tax year.

You can split the allowance across various types of ISA’s which have varying degrees of risk and reward and remember that unused allowances cannot be carried forward.

Maximise Pension Contributions

Pension contributions benefit from tax relief at your marginal rate. For most individuals, the annual allowance is £60,000.

For higher earners, pension contributions can help restore lost personal allowance where income exceeds £100,000.

Use the Dividend Allowance

If you own shares or run a limited company, remember the dividend allowance (currently £500). Dividends within this threshold are tax-free, although they still count towards your basic or higher-rate band.

Make Use of Your Capital Gains Tax Allowance

Each individual has an annual Capital Gains Tax (CGT) exemption (currently £3,000). If you are planning to sell investments, property (excluding your main home) or other chargeable assets, consider doing so before the tax year ends to utilise this exemption.

Married couples and civil partners can transfer assets between them tax-free, potentially doubling the available CGT exemption.

Review Your Personal Allowance

Most taxpayers are entitled to a personal allowance (£12,570), but it is reduced by £1 for every £2 earned over £100,000. If your income is close to this threshold, pension contributions or charitable Gift Aid donations before year-end may help preserve your full allowance.

Make Charitable Donations

Gift Aid increases the value of charitable donations and allows higher-rate taxpayers to reclaim additional relief through their tax return. Donations must be made before 5 April to count for the current tax year (unless carried back via a self-assessment return).

Marriage Allowance Transfers

If one spouse earns below the personal allowance and the other is a basic-rate taxpayer, up to £1,260 of allowance can be transferred, potentially saving up to £252 in tax for the year.

 

Tax planning should align with your broader financial goals, not simply chase reliefs.

With the tax year-end approaching on 5 April 2026, reviewing your position now gives you time to implement changes effectively and not loose any allowances.

Early action, informed advice, and careful planning remain the cornerstones of efficient tax management.

Andrea Gallagher is a Senior Manager at Abac, Chartered Accountants.

This article is for general information only. You are recommended to seek professional advice before taking action on the basis of the contents of this article.