Our top 10 tax year-end planning tips for 2025/26

3 February 2026

Overview

Review your tax year-end planning now before it’s too late. With the filing deadline for 2024/25 tax returns out of the way, now is a good time to take stock and consider whether all allowances and reliefs have been maximised as far as possible and whether any action needs to be taken before the new tax year begins.

Our top ten tax year-end planning tips to consider

Planning tip	Relevant to	Possible action
Tip 1 Director/shareholders of owner managed businesses should review their remuneration package in advance of the new tax year to ensure that it is as tax efficient as possible.	Directors/shareholders	Consider paying a combination of low salary, high interest and dividends. This could result in tax free income of up to £19,070 in 2025/26 and 2026/27 and double that for couples, if structured correctly and depending on the specific circumstances of the individual. Read more here.
Tip 2 Dividend tax rates for basic rate payers will increase to 10.75% (from 8.75%) and for higher rate taxpayers to 35.75% (from 33.75%) from April 2026. Dividend tax rates for additional rate taxpayers will remain at 39.35%.	Directors/shareholders	For directors of owner managed businesses, consideration should be given to accelerating dividend payments into 2025/26 to take advantage of current, lower rates as part of their remuneration planning strategy. This should, however, be weighed up against cash flow requirement, although could be credited to the director’s loan account, as well as the tapering of personal tax allowances.
Tip 3 The tax-free dividend allowance is £500 for 2025/26 and 2026/27.	Directors/shareholders	Where possible ensure that dividend allowances have been fully utilised by 5 April 2026. Spouse planning could also be considered (if they are not already a shareholder) to double the available (although now quite modest) tax-free allowances.
Tip 4 The personal allowance is reduced by £1 for every £2 of net income over £100,000 meaning that those with income of between £100,000 and £125,140 could have a marginal tax rate as high as 60%.	High earners	If your income is within this threshold, you could consider ways to reduce your taxable income such as making pension contributions, charitable donations, deferring income into 2026/27 or transferring income producing assets to your spouse.
Tip 5 The personal savings allowance allows the first £1,000 of savings income to be paid tax free to basic rate taxpayers. This drops to £500 for higher rate taxpayers and nil for additional rate taxpayers.	Savers	If you are a director and have loaned money to the company, you could consider paying a commercial rate of interest on the loan to utilise this allowance. Note, however, that the company would need to deduct basic rate tax and submit a CT61 form to HMRC. If you are a higher/additional rate taxpayer and you receive large amounts of interest, you could consider transferring savings held in your own name to your spouse.
Tip 6 If you or your spouse’s taxable income exceeds £60,000 for the tax year this could lead to a claw back of child benefit under the high-income child benefit charge. Once taxable income reaches £80,000 the benefit will be lost in full.	Parents	Reducing, deferring or transferring taxable income as described for higher earners above could help to preserve this benefit. If you do not currently claim child benefit it may be worth revisiting following the increase in thresholds in 2024/25. It may also be possible to get a back payment for up to three months prior.
Tip 7 Up to £1,260 of your personal allowance can be transferred to a spouse or civil partner if neither of you are higher rate taxpayers, by virtue of the marriage allowance.	Spouses	A transfer of allowance claim is easy to make and can be of benefit where one spouse has income of less than the personal allowance (currently frozen at £12,570), with a tax saving of up to £252 per annum.
Tip 8 Increased limits for companies receiving investment under EIS and VCT schemes have been announced with effect from 6 April 2026, potentially widening the scope for such investments. These schemes give provide the incentive of income tax relief in exchange for the underlying investment carrying a varying degree of commercial risk.	Investors	If you have any surplus cash, you could look to make a tax efficient investment. There are various options which typically offer income tax relief starting at 20% (but can be as high as 50%) and with tax free capital gains on disposal. It may also be possible to carry back an investment made in 2025/26 to 2024/25 to accelerate the tax relief.
Tip 9 The capital gains tax annual exemption for all individuals is £3,000 for 2025/26 and 2026/27. Any unused exemption is lost. Business asset disposal relief (BADR) rates are set to increase from 14% to 18% in April 2026.	Investors	Consideration should be given to the transfer of assets between spouses such that both utilise their annual exemptions on a subsequent disposal. Claiming/crystallising capital losses could also help to offset future gains with the reducing allowances. If you are in the process of selling your business or thinking about doing so in the near future, timing could be key to try and access lower capital gains tax rates and claiming BADR.
Tip 10 The annual allowance for pension contributions is £60,000 for 2025/26. This is reduced, however, proportionately for individuals with adjusted income above £260,000 by £1 for every £2 above this threshold down to a minimum limit of £10,000. This reduction also only applies where your ‘threshold income’ (broadly taxable income) is also over £200,000.	High earners	You could consider utilising your pensions allowance wherever possible as well as any unused allowances from the prior three tax years.