Year-End Tax Planning 2025-26: The Complete Checklist Before April

Last Updated: December 2025 | Tax Year: 2025-2026

Happy Christmas! While you're enjoying the festivities, there's something quietly ticking away in the background: the 5th April 2026 deadline. Every tax allowance you don't use this year? Gone. Forever. No rollovers, no extensions.

The good news: you still have over three months to act. The bad news: January and February will fly by, and suddenly it's March panic season. So let's get you sorted now.

This comprehensive checklist covers every major tax allowance and deadline for the 2025-26 tax year. Print it, bookmark it, share it with your family. Future you will be grateful.

Quick Summary: The Numbers That Matter

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Part 1: ISA Planning (Priority: HIGH)

Your £20,000 ISA Allowance

The ISA (Individual Savings Account) allowance is the most valuable tax shelter available to ordinary savers. £20,000 per year, completely tax-free. No income tax on interest, no capital gains tax on growth, no tax on dividends. Ever.

The critical point: This allowance doesn't roll over. If you only use £5,000 this year, you can't add £35,000 next year. It's gone.

ISA Types to Consider

Cash ISA - Best for:

• Emergency fund (3-6 months expenses)
• Short-term savings (1-3 years)
• Those who can't stomach investment risk
• Current rates: Up to 5%+ available

Stocks & Shares ISA - Best for:

• Long-term wealth building (5+ years)
• Retirement savings beyond pensions
• Anyone paying higher-rate tax on dividends
• Historical returns: ~8-10% annual average (with volatility)

Lifetime ISA (LISA) - Best for:

• First-time buyers saving for a deposit
• Additional retirement savings (can't access until 60)
• Limit: £4,000/year (counts toward £20,000 total)
• Bonus: 25% government top-up (up to £1,000/year free money)

ISA Action Checklist

• Check how much of your £20,000 allowance you've used (check with your provider)
• If married/partnered: Have you both used your allowances? That's £40,000 between you
• Consider "Bed and ISA" - selling investments and rebuying inside an ISA (see CGT section)
• LISA holders: Have you contributed your £4,000 maximum?
• Junior ISA: £9,000 allowance for children under 18

Pro Tip: You can open an ISA on 5th April at 11:59pm and still claim the full 2025-26 allowance. But don't leave it that late. Systems crash, banks close, life happens.

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Part 2: Pension Contributions (Priority: HIGH)

The £60,000 Annual Allowance

Pensions remain the most tax-efficient savings vehicle in the UK. Contribute £10,000 as a higher-rate taxpayer, and it only costs you £6,000 after tax relief. That's a guaranteed 66% return before any investment growth.

2025-26 Annual Allowance: £60,000 (or 100% of earnings, whichever is lower)

High Earners: Watch the Tapered Allowance

If your "adjusted income" exceeds £260,000, your annual allowance tapers down:

• £260,000-£360,000: Reduces by £1 for every £2 over £260k
• Above £360,000: Minimum allowance of £10,000

Carry Forward: The Hidden Bonus

Didn't use your full pension allowance in the last three years? You might be able to carry it forward:

This means someone with £95,000 unused allowance could contribute up to £155,000 this year (£60,000 current + £95,000 carried forward), assuming they have the earnings to support it.

Pension Action Checklist

• Check your current pension contributions for 2025-26
• Calculate unused allowance from the last 3 years
• £100k earners: Contribute enough to drop below £100,000 (avoid the 60% trap)
• Self-employed: Have you made any contributions? No employer doing it for you
• Review SIPP options if your workplace pension has high fees
• Spouse not working? You can contribute £2,880/year (topped up to £3,600)

Warning: Pension contributions must clear by 5th April. Bank transfers take time. Don't leave it until the last week.

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Part 3: Capital Gains Tax Planning (Priority: MEDIUM-HIGH)

The Shrinking CGT Allowance

The Capital Gains Tax annual exempt amount has been slashed:

• 2022-23: £12,300
• 2023-24: £6,000
• 2024-25: £3,000
• 2025-26: £3,000

This means gains above £3,000 are taxed at:

• 10% (basic rate taxpayers) / 18% (residential property)
• 20% (higher rate taxpayers) / 24% (residential property)

CGT-Saving Strategies

1. Use Your Allowance Every Year If you have investments with gains, consider selling £3,000 worth of gains each year (and rebuying if you want to keep the investment). This "crystallises" the gain tax-free.

2. Bed and ISA Sell investments, use the gain against your £3,000 allowance, then immediately rebuy inside your ISA. Future growth is then completely tax-free.

3. Bed and Spouse Sell investments, have your spouse rebuy them (must be a genuine transfer). Uses their £3,000 allowance. Combined: £6,000 tax-free gains per year.

4. Offset Losses Made a loss on an investment? Crystallise it before April. Losses can offset gains in the same year or be carried forward indefinitely.

CGT Action Checklist

• Review investment portfolio for unrealised gains
• Calculate if you're approaching the £3,000 threshold
• Consider "Bed and ISA" for gains under £3,000
• Harvest any losses to offset against gains
• Check if your spouse has unused CGT allowance
• Property investors: Review lettings relief and PPR rules

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Part 4: Dividend and Savings Allowances (Priority: MEDIUM)

Dividend Allowance: Just £500

The dividend allowance has shrunk dramatically:

• 2022-23: £2,000
• 2023-24: £1,000
• 2024-25: £500
• 2025-26: £500

If you receive dividends above £500 (outside an ISA), you'll pay:

• 8.75% (basic rate)
• 33.75% (higher rate)
• 39.35% (additional rate)

Action: Move dividend-paying investments into ISAs where possible.

Personal Savings Allowance

Interest on savings accounts is taxed, but you get an allowance:

• Basic rate taxpayers: £1,000 tax-free interest
• Higher rate taxpayers: £500 tax-free interest
• Additional rate taxpayers: £0 (no allowance)

With savings rates at 5%+, it's easy to exceed these limits:

• £20,000 at 5% = £1,000 interest (exceeds higher-rate allowance)

Action: Maximise Cash ISA usage before standard savings accounts.

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Part 5: Marriage Allowance (Priority: MEDIUM)

Transfer £1,260 of Personal Allowance

If you're married or in a civil partnership, the lower earner can transfer £1,260 of their Personal Allowance to the higher earner—but only if the higher earner is a basic rate taxpayer.

Saving: Up to £252 per year

Eligibility:

• One partner earns under £12,570 (not using full Personal Allowance)
• Other partner earns between £12,571 and £50,270 (basic rate only)

The Backdating Bonus

You can claim for the previous 4 tax years. If you've been eligible since 2021-22 and never claimed, that's potentially £1,000+ in backdated tax relief.

Marriage Allowance Checklist

• Check if you're eligible: gov.uk/marriage-allowance
• One partner retired/part-time/stay-at-home parent? Likely eligible
• Apply online - takes 10 minutes
• Backdate up to 4 years if newly applying
• Note: Transfer continues automatically until you cancel

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Part 6: Self-Assessment Deadlines (Priority: HIGH if applicable)

Key Dates for 2024-25 Tax Return

Self-Assessment Checklist

• Gather all income documentation (P60, P11D, bank statements)
• Collect receipts for allowable expenses
• Check student loan type and repayment status
• Review Gift Aid donations for higher-rate reclaim
• Calculate any rental income and allowable deductions
• Don't forget foreign income if applicable
• Set aside money for the tax bill NOW

Late Payment: Miss 31st January and you'll face:

• £100 immediate penalty
• Daily penalties after 3 months
• Interest on unpaid tax
• Further penalties at 6 and 12 months

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Part 7: Other Allowances Not to Miss

Trading Allowance: £1,000

If you have a small side hustle (eBay selling, freelance work, etc.), you don't need to report income under £1,000. Above that, you can choose to:

• Deduct £1,000 flat (no receipts needed), OR
• Deduct actual expenses (if they exceed £1,000)

Rent-a-Room Scheme: £7,500

Rent out a furnished room in your home and earn up to £7,500 tax-free. Must be your main residence. Doesn't apply to Airbnb of entire property.

Charitable Giving: Gift Aid

Made charitable donations this year? Higher and additional rate taxpayers can claim back the difference between their rate and basic rate.

Example: £1,000 donation

• Charity claims £250 Gift Aid (basic rate)
• Higher rate taxpayer claims £250 back on tax return
• Effective cost to you: £500 for a £1,250 donation

Employer Benefits

Check if you're missing out on:

• Cycle to Work scheme (save ~32-42% on a bike)
• Electric Vehicle salary sacrifice (no BIK tax until 2028)
• Childcare vouchers (if enrolled before Oct 2018)
• Tax-Free Childcare (up to £2,000/year per child)

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Part 8: Your January-March Action Plan

January 2026

• Complete 2024-25 Self Assessment tax return
• Pay any tax owed by 31st January
• Review ISA contributions to date
• Start pension contribution calculations
• Check CGT position on investments

February 2026

• Make additional pension contributions if using carry-forward
• Execute any "Bed and ISA" transactions
• Apply for Marriage Allowance if eligible
• Review and claim business expenses

March 2026 (Don't Leave It This Late!)

• Final ISA contributions by 5th April
• Last-minute pension top-ups (allow 5 working days to clear)
• Confirm all Gift Aid donations are recorded
• Check payroll for correct tax code

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Common Mistakes to Avoid

1. Assuming You Have Until 5th April

Many transactions need processing time. Pension contributions, bank transfers, and investment purchases can take 3-5 working days. Treat 31st March as your real deadline.

2. Forgetting Your Spouse's Allowances

You're a team. Two ISA allowances (£40,000), two CGT allowances (£6,000), two pension allowances (potentially £120,000). Use them all.

3. Ignoring Carry-Forward Rules

Three years of unused pension allowance could mean a massive tax-efficient contribution this year. Check your pension statements.

4. Not Checking Your Tax Code

An incorrect tax code means you're overpaying or underpaying tax all year. Check your code at gov.uk/check-income-tax.

5. Missing the £100k Trap

Earning between £100,000 and £125,140? You're in the 60% tax bracket. A well-timed pension contribution could save you thousands. Read our full guide.

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Tools to Help You Plan

PayeTax Calculator

Use our free UK tax calculator to:

• Calculate your exact take-home pay
• See the impact of pension contributions
• Understand your marginal tax rate
• Plan salary sacrifice savings

HMRC Resources

• Check your Income Tax
• Marriage Allowance application
• Self Assessment registration
• ISA limits and rules

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Final Thoughts

Tax planning isn't about cheating the system—it's about using the allowances Parliament intended you to have. Every year, billions of pounds in allowances go unused simply because people don't know about them or leave things too late.

You've now got over 100 days until the 5th April 2026 deadline. That's plenty of time to:

1. Max out your ISA
2. Boost your pension
3. Use your CGT allowance
4. Claim Marriage Allowance
5. File your Self Assessment

Don't be the person scrambling on 4th April. Be the person sipping tea on 5th April, knowing everything's sorted.

Merry Christmas, and here's to a tax-efficient 2026!

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This article is for general information only and does not constitute financial advice. For complex tax situations, consult a qualified accountant or tax advisor. Tax rules can change—always verify current rates with HMRC.