Tax Year End

I hope you are well and easing into the new year.

However, if last year is anything to go by, this year is going to fly by, and as such, we wanted to remind you of some key planning points to take care of in advance of the 5th April, and also highlight some of the changes in the Budget which are planned to take effect from 6th April.

Basic Planning Points – the usual reminders

• ISA allowances – your annual ISA allowance is use-it-or-lose-it, and any unused portion cannot be carried forward. Remember if you have withdrawn from an ISA this year, you have until the 5th April to pay it back!
• Pension contributions – contributions provide valuable tax relief and can help reduce your taxable income.  There are no major changes slated to pension contributions until 6th April 2029 (a big change is coming regarding salary sacrifice contributions), so take advantage whilst you can.  Once we know more about the future plans, we will be in touch.
• Capital gains allowances – everyone has a basic tax free allowance of £3,000, but anything above that will be taxable.
• Inheritance tax gifting allowances – making gifts, coupled with bigger IHT planning ideas, can help reduce the value of your estate over time
• Tax Relief on VCTs – this is reducing from 30% to 20% from the 6th April, so this is the last year to take advantage of the higher tax relief.

A note on recent Budget changes

• The most recent Budget confirmed that personal tax allowances remain frozen until at least 2031, which in real terms can mean more people paying higher levels of tax as incomes rise.
• Dividend tax rates will increase by 2% from April 2026 and savings and property income tax rates are due to rise by 2% from April 2027.
• From 6th April 2026 the tax free relief on qualifying business and agricultural assets is now limited to 100% on the first £2.5 million (this has been increased from the £1 million originally mentioned in the Budget) and then 50% on anything above that – effectively giving a 20% IHT charge on the excess value
• And remember that from April 2027, pensions will form part of your Estate for IHT purposes.

This makes proactive planning particularly important to ensure you’re making the most of the allowances that are still available and to try to alleviate the implication of future changes.

We’ll continue to be in touch as usual but if you want to discuss any end-of-year planning (or anything else!) please give us a shout, we’d be very happy to help.

 

 

Carrington Wealth Management is a trading style of Carrington Investment Consultants Limited which is authorised and regulated by the Financial Conduct Authority. Registered office: One Chapel Place, London W1G 0BG. Registered in England, number 3193939. This email and any accompanying documents contain confidential information intended for a specific individual which is private and protected by law. If you are not the intended recipient, any disclosure, copying, distribution or other use of this information is strictly prohibited. You are also requested to advise us immediately if you receive information which is not addressed to you. IMPORTANT: This publication has been prepared for information purposes only by Carrington Investment Consultants Ltd. The value of investments, and any income generated from them, will be affected by interest rates, exchange rates, general market conditions and other political, social and economic developments, as well as by specific matters relating to the assets in which it invests. Investors should be aware that the value of units may well fall as well as rise, is not guaranteed and that past performance is not a guide to future performance. Different funds carry different levels of risk and investors may not get back the full amount invested. VCTs are specialist investment products that carry a higher level of risk than many other forms of investment. VCTs are a long-term investment with a minimum holding period of five years. An investment into a VCT may ultimately prove to be difficult to sell when you come to dispose of your shares. The levels and bases of reliefs from taxation provided by a VCT may change in future. If a VCT loses HMRC approval, then the tax reliefs you have previously been given may be clawed back. Future changes in legislation may adversely affect the value of an investment into a VCT. The value of investments, and any income generated from them, will be affected by interest rates, exchange rates, general market conditions and other political, social and economic developments, as well as by specific matters relating to the assets in which it invests. Investors should be aware that the value of units may well fall as well as rise, is not guaranteed and that past performance is not a guide to future performance. Different funds carry different levels of risk and investors may not get back the full amount invested. Data Source: Financial Express. Copyright © 2025 Carrington Wealth Management. All rights reserved.