End of tax year planning 2025 2026

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Canada Life International: For full or partial surrender requests, please send a completed form to us at claims@canadalifeint.com as soon as possible for the transaction to be processed as part of the 2025/26 tax year. The last date we can receive these requests is 26th March 2026. This will ensure that it has an effective date for this tax year even if the transaction is not completed during the current tax year. If you wish the transaction to be fully completed in the current tax year then the request should be with us by 6th March.

End of Tax Year Planning Checklist

Liz Hardie, Technical Specialist at Canada Life, shares a practical end of tax year planning checklist to help advisers focus on the key actions to consider before 5 April.

With allowances frozen and further changes ahead, it provides a timely prompt for client reviews across income tax, capital gains tax, inheritance tax and estate planning.

What is covered?

Income tax planning
Considerations for spouses and civil partners
Capital gains tax planning
Inheritance tax planning
General planning

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Income Tax planning:

Subscribe to ISAs: Allowances are lost if not used in the tax year:

ISA subscription limit: £20,000 (frozen until 2030).

Junior ISA/CTF: £9,000 limit

Lifetime ISA: £4,000 limit

Flexible ISA withdrawals: Reinvest cash withdrawn by 5 April to retain allowance

Consider AIM ISAs: For IHT relief (changing to 50% relief from April 2026).

Review investments and income requirements: Have circumstances or income requirements changed since last tax year end? Have all income tax zero rate bands and allowances been used? These can’t be carried into next tax year and have been frozen at current levels until 2031:

Personal Allowance (PA): £12,570

Dividend Allowance (DA): £500

Personal Savings Allowance (PSA): £1,000 for basic rate taxpayers; £500 for higher rate taxpayers; £0 for additional rate taxpayers

Starting Rate for Savings Band (SRSB): £5,000 (reduced by £1 for every £1 of non-savings income above PA)

Consider supplementing income with tax free income or gains from ISAs, or tax deferred withdrawals from investment bonds. Has an investment been producing more income than expected and become taxable? Dividend basic and higher rates increase to 10.75% and 35.75% from 6 April 2026; remember dividends are taxable even if reinvested. Do assets need to be rearranged to provide more or less taxable income?

Make pension contributions: these can be made for yourself, family members or for business owners, from a business to reduce profits. In addition to building up a pension pot for retirement, pension contributions can also reduce taxable income, provide tax relief or extend tax bands which, in turn, reduce tax payable (even on investment bond chargeable gains), can allow personal allowance to be regained for those with income over £100,000, or reduce High Income Child Benefit Tax charge, for those in receipt of Child Benefit but with income between £60,000 and £80,000. Check availability of:

Annual Allowance: The standard annual allowance is £60,000 for 2025/26.

Tapered Annual Allowance: For high earners, the annual allowance tapers down by £1 for every £2 of income above £260,000, to a minimum of £10,000 for those with income over £360,000

Carry Forward: If you haven’t used your full annual allowance in the past three years, you may be able use carry forward unused amounts, if you were a member of a registered pension scheme during those years.

Money Purchase Annual Allowance (MPAA): If you’ve already accessed your pension flexibly, your annual allowance may be reduced to £10,000. Be aware of this limit to avoid unexpected tax charges.

Business owners: consider making employer pension contributions for additional tax efficiency

Review EIS and VCT tax relief arrangements: From April 2026 income tax relief will reduce to 20% from 30%.

Complete self-assessment tax returns (if required): Ensure all taxable income, and dividends (even if reinvested) are reported, and tax paid, by deadlines. Also check if any tax paid needs reclaimed.

See Self Assessment tax returns: Deadlines - GOV.UK

Spouses and civil partners should consider:

Equalising assets: particularly income-producing assets and those with capital gains to make use of all allowances available and lower household tax

Checking eligibility for Married Couple’s Allowance: An additional income tax allowance of between £436 or £1,127 per year. Available for married couples and civil partners, where either of the couple was born before 6 April 1935. Claims can be backdated for up to four years.

See Married Couple's Allowance: Overview - GOV.UK

Checking eligibility for Marriage Allowance: A transferable tax allowance for married couples and civil partners. Available where one partner is a basic rate taxpayer and the other is a non-taxpayer. The non-taxpayer can transfer 10% of their unused personal allowance to the basic rate taxpayer which reduces their income tax bill. Claims can be backdated for up to four years.

See Marriage Allowance: How it works - GOV.UK

For capital gains tax planning, remember to:

Use annual exemption: £3,000 per person p.a. for 2025/26 (£1,500 for most trusts) which is lost if not used in the tax year. Consider switching to utilise, or equalising assets between spouses/civil partners to use both exemptions.

Review Bed & ISA arrangements: Consider switching off automatic arrangements to avoid unnecessary CGT or Inheritance Tax (IHT) implications

Crystallise losses: Register realised losses with HMRC within four years to offset against future gains indefinitely

Review reliefs available: Consider availability of Holdover Relief, Business Asset Rollover Relief, or Business Asset Disposal Relief (formerly Entrepreneurs’ Relief) for business owners

Report capital gains: Property and land capital gains tax is payable within 60 days of completion and non-property capital gains are reported and tax paid by self-assessment deadlines.

See Capital Gains Tax: what you pay it on, rates and allowances: Reporting and paying Capital Gains Tax - GOV.UK

For inheritance tax planning, remember to:

Use all exemptions and allowances: Consider using £3,000 annual exemption, small gifts (£250), or gifts out of normal expenditure (keep records)

Equalise business/agricultural property: Allowance for 100% relief from April 2026, increased to £2.5m from £1m on 23 December 2025, and is now transferable, 50% relief above this. AIM shares relief is 50% with no allowance available

Plan for pension changes: From April 2027, unused pension funds and death benefits will be included in IHT estates. Review whether to draw tax free cash or regular income for expenditure in retirement or gifting using exemptions. Remember that inherited pension pots will also become subject to IHT from April 2027.

Review pension nominations: Ensure pension death benefit nominations are up to date and reflect your wishes, especially in light of upcoming IHT changes (from April 2027.

Consider gifting and trust planning: Consider the order of gifts (wills, gift & loan, exemptions, PETs, CLTs) for optimal tax outcomes. Use trusts for IHT mitigation and control over asset distribution.

General planning

Review wills: Ensure they are up-to-date and reflect current wishes and family circumstances

Review power of attorney arrangements: If the donor is losing capacity, the lasting power of attorney (LPA) must be in place before decisions are needed; attorneys cannot be appointed after the fact. Ensure lasting power of attorney (LPA) is drawn up and properly registered.

Consider creating an inventory of digital assets: Digital assets include online bank accounts, cryptocurrencies, investment platforms, social media, email accounts, cloud storage, digital photos, intellectual property, etc. Make a comprehensive list, including account details, platforms, and approximate values.