As we approach April 5th, 2026, the window for the current tax year is closing. In the world of UK personal finance, this is “Use It or Lose It” season.
Because many allowances do not roll over, failing to act by midnight on the 5th could mean paying more tax than necessary or missing out on government top-ups.
Here is your Money Simplified checklist for the 2025/26 year-end.
1. The ISA “Use It or Lose It” (£20,000)
Your ISA allowance is a powerful shield against Capital Gains Tax (CGT) and Dividend Tax—both of which have seen their tax-free thresholds slashed in recent years.
- The Action: Ensure you have utilized as much of your £20,000 allowance as possible.
- The Logic: You can split this across Cash, Stocks & Shares, or Innovative Finance ISAs.
- The “LISA” Bonus: If you are under 40 and saving for a first home, putting £4,000 into a Lifetime ISA triggers a £1,000 government bonus. This £4,000 counts towards your total £20,000 limit.
2. Pension Contributions (£60,000)
Pensions remain the single most effective way for higher-rate taxpayers to “buy back” their hard-earned cash from HMRC.
- The Action: Top up your pension to utilize your £60,000 Annual Allowance.
- The “Carry Forward” Hack: If you’ve maxed out this year, remember you can reach back to the previous three years (2022/23, 2023/24, 2024/25) to use any leftover allowance.
- The £100k “Tax Trap”: If you earn between £100,000 and £125,140, a pension contribution can bring your “adjusted net income” back down, restoring your Personal Allowance and effectively giving you 60% tax relief.
3. Capital Gains Tax (CGT) & Dividends
The tax-free thresholds for these have been aggressively reduced. For 2025/26:
- CGT Allowance: £3,000. If you have investments outside an ISA with unrealized gains, consider selling enough to use this allowance before April 5th.
- Dividend Allowance: £500. Any dividends earned outside an ISA or pension above this amount are taxable.
- Bed & ISA: Consider selling shares held in a standard brokerage account and immediately rebuying them within an ISA. This “wraps” the assets in a tax-free bubble for the future.
4. Inheritance Tax (IHT) Gifting
IHT receipts in the UK are at record highs. Using your annual exemptions now can significantly reduce a future tax bill for your heirs.
- Annual Exemption: You can gift £3,000 per year entirely IHT-free. If you didn’t use last year’s allowance, you can carry it forward one year—meaning a couple could potentially gift £12,000 this month (£6k each).
- Small Gift Allowance: You can give £250 to as many different people as you like, provided you haven’t used another allowance on them.
5. Check Your National Insurance (NI) Record
If you are approaching retirement, a gap in your NI record could cost you thousands in lost State Pension income over your lifetime.
- The Action: Check your record on GOV.UK. You can usually pay “voluntary contributions” to fill gaps from the last six years.
- The Deadline: Sometimes there are extensions for older years, but April 5th is always the key cut-off for the rolling six-year window.
Important Dates to Watch
| Date | Action Required |
| April 2nd – 3rd | Internal Deadlines. Many banks and providers require 48-72 hours to process payments. Don’t wait until the 5th. |
| April 5th (Midnight) | Official Deadline. The 2025/26 tax year ends. |
| April 6th | New Year Starts. All allowances reset. |
A Note on “Fiscal Drag”: With many tax thresholds frozen until 2031, more of your income is likely being pushed into higher brackets as wages rise. Taking advantage of these allowances now isn’t just “extra”—it’s a defensive necessity. Check out our Fiscal Drag calculator for more information.
2025/26 vs. 2026/27 Tax Year Comparison Table
| Allowance / Threshold | 2025/26 (Current) | 2026/27 (Starts April 6) | Status / Action |
| Personal Allowance | £12,570 | £12,570 | Frozen. Use pension to lower taxable income. |
| Higher Rate Threshold | £50,270 | £50,270 | Frozen. More earners hitting 40% tax. |
| Annual ISA Limit | £20,000 | £20,000 | Use it or Lose it. Cannot be carried forward. |
| Pension Annual Allowance | £60,000 | £60,000 | Carry Forward available for 3 years. |
| Capital Gains Tax (CGT) | £3,000 | £3,000 | Fixed. Consider “Bed & ISA” to wrap gains. |
| Dividend Allowance | £500 | £500 | Fixed. Move dividend stocks into ISAs. |
| Lump Sum Death Benefit | £1,073,100 | £1,073,100 | Fixed. Affects tax-free pension death benefits. |
| IHT Annual Gift Limit | £3,000 | £3,000 | Fixed. Carry forward only 1 year. |
| State Pension (Full New) | £11,502 (approx) | £11,970 (est) | Rising. Triple Lock increase expected. |
Three Other “Midnight” Priorities (Before April 5th)
1. The CGT “Harvest”
If you have investments in a standard (non-ISA) brokerage account that have grown, you should consider selling enough to realize £3,000 of profit before April 5th.
- Why: This £3,000 gain is completely tax-free. If you wait until April 6th, you are using next year’s allowance, essentially wasting this year’s tax-free “slot.”
2. The Marriage Allowance (£1,260 Transfer)
If you are married or in a civil partnership and one of you earns less than the £12,570 Personal Allowance while the other is a basic-rate (20%) taxpayer, you can transfer 10% of the unused allowance.
- The Benefit: This can save you up to £252 in tax.
- The Deadline: You can backdate claims for up to 4 years, but the 2021/22 window closes on April 5th, 2026.
3. The “Pension Recycling” Check
If you have already accessed your pension and are now in “Drawdown,” remember your Money Purchase Annual Allowance (MPAA) is likely restricted to £10,000.
- The Action: Ensure your total contributions (including employer ones) haven’t breached this lower limit before the year ends, as the tax charges for doing so are significant.
The “Money Simplified” Closing Advice
“The UK tax system is currently designed to let ‘inflation’ do the taxman’s work. By freezing thresholds like the Personal Allowance while wages rise, HMRC collects more money without ever ‘raising’ taxes. Utilizing your ISA and Pension allowances isn’t just a bonus anymore- it is the only way to prevent your take-home pay from shrinking in real terms.”
