Tax year-end planning: what you can still do before 5th April

As the end of the tax year approaches, many individuals and business owners assume that any meaningful tax planning opportunities have already passed. In reality, there is often still time to take practical steps before 5th April that can make a real difference to your overall tax position.

Tax year-end planning is not about rushing decisions at the last minute. Instead, it is an opportunity to review your current position, ensure available allowances are being used efficiently, and put sensible plans in place before they reset for the new tax year.

Using personal allowances effectively

Everyone benefits from a personal allowance, which enables a certain level of income to be received free from income tax. Where one spouse or civil partner has unused allowances or lower tax bands, it may be possible to restructure income or asset ownership to reduce the household’s overall tax burden.

For eligible couples, the Marriage Allowance may also be worth considering. Although the savings can appear modest, they can add up over time and are often overlooked.

Pension contributions as a powerful planning tool

Pension contributions remain one of the most effective ways to achieve tax efficiency before the end of the tax year. Contributions can attract income tax relief at your highest marginal rate, making them particularly valuable for higher and additional rate taxpayers.

In some cases, it may be possible to use unused annual allowance from previous tax years, increasing the scope for contributions. Business owners may also benefit from employer pension contributions, which can be both tax-efficient and commercially sensible. Given the various limits and conditions involved, this is an area where tailored advice is especially important.

Making use of ISA allowances

ISA allowances reset each tax year and cannot be carried forward. Any unused allowance is therefore lost if not used by 5th April. While ISAs are often associated with long-term savings, they can also play a valuable role in wider tax planning by sheltering investment growth and income from tax.

Depending on your objectives and attitude to risk, a combination of cash and investment-based ISAs may be appropriate. Using allowances gradually and consistently can provide flexibility and tax efficiency over time.

Capital gains tax considerations before year end

If you are considering selling assets such as investments or property, the timing of disposals can be critical. Each individual has an annual Capital Gains Tax exemption, which is lost if not used within the tax year.

With careful planning, it may be possible to realise gains up to the exemption limit, offset gains against available losses, or transfer assets between spouses or civil partners to make use of multiple exemptions. As Capital Gains Tax rules continue to evolve, early review can help avoid unnecessary tax liabilities.

Reviewing gifts and inheritance tax planning

The end of the tax year is also a useful point to revisit lifetime gifting strategies as part of longer-term inheritance tax planning. Certain gifts are immediately exempt, while others may fall outside the estate after a period of time.

Regular gifts made from surplus income, when properly structured and documented, can be particularly effective. Although inheritance tax planning is often long-term in nature, small, consistent actions taken each year can have a meaningful cumulative impact.

Planning opportunities for business owners

For business owners and company directors, tax year-end planning often involves balancing personal and corporate considerations. Decisions around dividend levels, remuneration, pension contributions and capital investment can all influence the overall tax outcome.

Reviewing these areas before the year end allows time to align tax efficiency with wider commercial objectives, rather than reacting after the deadline has passed.

Why acting before 5th April matters

Many allowances and reliefs reset at the start of the new tax year. Once the deadline passes, opportunities that were available may be lost permanently. Taking the time to review your position before 5th April can help ensure you are well prepared for the year ahead and not paying more tax than necessary.

If you would like to review your position before 5th April, our team can provide tailored advice and help you identify opportunities that still remain.