As the end of the tax year approaches, it is an important time for investors and advisers to review tax-efficient planning opportunities and ensure allowances are not wasted.

A key priority is maximising contributions to ISAs and pensions. Individuals can currently invest up to £20,000 per tax year into ISAs, with all growth and income free from UK tax. Investors should, however, be mindful of forthcoming changes. From 6 April 2027, the Cash ISA allowance for those under age 65 is due to reduce to £12,000, increasing the importance of reviewing how ISA allowances are allocated between cash and investments.

Pension contributions remain very attractive, with an annual allowance of up to £60,000 (or 100% of relevant UK earnings if lower), and tax relief available at an individual’s marginal rate.

For further diversification, Venture Capital Trusts (VCTs) and the Enterprise Investment Scheme (EIS) can provide additional tax planning opportunities, although these carry higher risk. VCTs currently offer 30% income tax relief on investments of up to £200,000 per tax year, but this is scheduled to reduce to 20% from 6 April 2026. EIS continues to offer 30% income tax relief on investments of up to £1 million per year (or £2 million for knowledge-intensive companies), alongside other reliefs.

Capital gains planning also remains important. The annual Capital Gains Tax (CGT) exemption is £3,000 per person, with gains above this taxed at 18% or 24% depending on income levels.

Finally, investors should plan ahead for proposed changes to pension death benefits from 6 April 2027, when inheritance tax is due to be applied to pension death benefits passed to non-spousal beneficiaries. Reviewing nominations in advance will therefore be essential.

Proactive planning can help investors maximise allowances, increase tax efficiency, and align strategies with longer-term goals and objectives.

Matthew Crawshaw
Regional Director

The value of any investment and the income arising from it is not guaranteed and can fall as well as rise, so that you may not get back the amount you originally invested. Past performance is not a reliable indicator of future results. References to tax implications and legislation are correct as at February 2026 but are subject to change and will be dependent on your personal circumstances.