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Year-End Tax Planning: How to Protect Your Finances Before April 5th 2026

11 March 2026

The tax year ends on 5th April 2026.

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The tax year ends on 5th April 2026, and the window to make the most of your tax allowances is closing fast.

For residents and business owners in Dorset, including Bournemouth, Christchurch, and Poole, acting now can make a real difference. From 6th April, higher dividend tax rates and an increase in Business Asset Disposal Relief (BADR) will come into effect. Early planning is key.

Year-End Tax Moves to Consider

1. Maximise Your ISA

  • You can invest up to £20,000 this tax year.
  • All growth, dividends, and interest are tax-free.
  • Any unused allowance cannot be carried forward.

2. Use Your Capital Gains Allowance

  • The £3,000 CGT exemption is only available for this year.
  • Realising gains now avoids paying tax on that portion.

3. Reduce High-Income Tax

  • If your earnings are between £100,000 and £125,140, your personal allowance gradually disappears.
  • Pension contributions can restore it, lowering your effective tax rate.

4. Business Owners: Check Your Sales

  • The BADR rate rises from 14% to 18% from 6th April.
  • Completing qualifying business sales before the year-end can save thousands in tax.

5. Trustees: Plan Trust Distributions

  • Trusts have a £1,500 annual CGT exemption.
  • Distributing income to beneficiaries can make use of their lower tax bands.

Pension and Inheritance Tax: What’s Coming

From April 2027, most unused pensions and death benefits will count towards Inheritance Tax.

Previously, pensions were often left untouched because they sat outside your estate. That changes next year:

  • Large pensions could face 40% IHT.
  • Estates over £2 million may lose part of the Residence Nil Rate Band.
  • Beneficiaries may still pay income tax on withdrawals, a potential double tax hit.

The 2026/27 tax year is the perfect time to review withdrawals, gifts, and overall estate planning.

Take Action Before 5th April

Waiting until the last-minute limits your options. Using allowances now protects your finances and reduces future tax exposure.

Professional advice can help ensure you act effectively before the tax year closes.

Time is running out to make the most of your allowances and plan for upcoming tax changes. Our experienced team can help you. Contact our offices to speak with a member of our team on 01202 294411 or go online: Contact Us AB Solicitors For Your Legal Needs

 

 

Further Information
Tax & Trusts