Families with pensions, savings and investments are being urged to act before the end of the tax year – or risk missing out on valuable allowances and reliefs.
Wealth manager Evelyn Partners has set out eight key financial checks ahead of the new tax year on April 6, warning that frozen thresholds and looming inheritance tax (IHT) reforms mean more households are being dragged into higher tax bills. Emma Sterland, chief financial planning officer at Evelyn Partners, said: “As the 2025/26 tax year draws to a close, it’s important to reflect on whether current allowances and reliefs are being well utilised.
“But it is also necessary to assess whether your financial and wealth strategy is fit for purpose in the context of changes to taxation that are coming in both this and next April.”
She added: “In addition to changes in taxation, the overall increase in the tax burden due to frozen allowances and reliefs demands that all families make sure they are making the most of their earnings, savings and investments.”
Here are the key danger points – and opportunities – before the tax year ends.
1. Inheritance tax gifting rules tighten
From April 6, a £2.5million cap will apply to 100% business and agricultural property relief. From April 2027, unused pension pots will also be pulled into estates for IHT purposes.
Ms Sterland said: “One of the most straightforward ways to make sure your loved ones benefit from your wealth is to gift assets during lifetime.”
The £3,000 annual gifting allowance – £6,000 for couples – can be carried forward one year if unused, potentially allowing up to £12,000 per couple to be passed on before April 5.
She added: “Gifts you make to other people are generally not subject to IHT unless you die within seven years, and many families have decided to start that clock ticking.”
2. Watch the higher-rate tax cliff
Many retirees drawing private pensions risk tipping into the 40% higher-rate band at £50,270 – or even the punitive 60% effective rate above £100,000 where the personal allowance is withdrawn.
Ms Sterland said: “If possible, keeping one’s taxable income the right side of the next tax band can make sense.”
She warned that some savers withdrawing more from pensions ahead of the 2027 IHT change must weigh up the immediate income tax cost against a potential future inheritance tax bill.
3. The 60% tax trap
Those earning between £100,000 and £125,140 face an effective marginal rate of up to 60–62%.
Ms Sterland said: “There are some relatively straightforward steps you can take to reduce taxable income.”
These include making pension contributions, using salary sacrifice, making charitable donations under Gift Aid, or shifting income-generating assets between spouses.
4. Use your £60,000 pension allowance
The annual pension allowance stands at £60,000, although high earners can see this tapered down to as little as £10,000.
Ms Sterland warned: “There’s no guarantee that the higher AA or carry forward will be around forever, so it makes sense to prioritise pension saving in order to keep more earned income and efficiently build wealth.”
Unused allowances from the previous three years may be available under carry-forward rules.
5. Couples should split savings smartly
Basic-rate taxpayers can earn £1,000 a year in savings interest tax-free; higher-rate taxpayers £500. Additional-rate taxpayers get no personal savings allowance.
Only £500 of dividend income is tax-free per person.
Ms Sterland said spouses should ensure assets are held by the partner who pays the lowest rate of tax, adding that “holding a large amount of cash savings is potentially unrewarding, unless protected from tax in a cash ISA.”
6. Don’t waste your £3,000 CGT allowance
The annual capital gains tax exemption has been slashed to £3,000.
With CGT now charged at 18% and 24% on most assets, investors may want to “crystallise” gains before April 5 to use the allowance – or realise losses to offset against gains.
Assets can be transferred between spouses tax-free to double up exemptions.
7. ISA deadline looms
The £20,000 annual ISA allowance cannot be carried forward.
Ms Sterland said: “Annual ISA allowances cannot be carried forward if not used.”
From April 2027, the cash ISA allowance for the under-65s will fall to £12,000, while the overall £20,000 cap remains frozen until 2030/31.
Junior ISAs allow up to £9,000 a year to be invested tax-free for children.
8. Business owners face IHT overhaul
From April 6 , the 100% rate of business and agricultural relief will only apply to the first £2.5million of qualifying assets.
Ms Sterland warned: “In some cases an unexpectedly large IHT bill can jeopardise the future of a firm and the jobs it provides if the liquid assets are not there to meet the expense.”
She urged affected owners to urgently review wills and succession plans.
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