Tax Allowances to Use Before 5 April 2027
The 2026/27 tax year is now well underway, and several key allowances will expire on 5 April 2027. Reviewing your finances early can make it easier to take full advantage of them before the deadline.
For people aged 50 and over, retirees, and those preparing for retirement, a little planning now could help protect more of your savings, investments and family wealth from unnecessary tax.
Make the most of your ISA allowance
One of the most valuable allowances available is your ISA allowance. During the current tax year, you can invest up to £20,000 in ISAs. Any interest, dividends and capital gains generated within an ISA are free from UK tax, and those benefits continue year after year.
If you have cash savings or investments held beyond an ISA, consider whether transferring some of those funds into an ISA before 5 April could benefit you. Once the deadline passes, any unused allowance is lost.
Review your savings interest
While higher interest rates have been welcome news for savers, they’ve also increased the likelihood of unexpected tax bills.
Basic-rate taxpayers can usually earn up to £1,000 of savings interest tax-free each year. Higher-rate taxpayers receive a £500 allowance, while additional-rate taxpayers receive none.
If your savings are generating substantial interest, it may be worth reviewing whether more of your money could be sheltered within tax-efficient accounts.
Don’t waste your Capital Gains Tax (CGT) allowance
The CGT annual exemption has fallen dramatically in recent years and now stands at just £3,000.
If you’re considering selling shares, investment funds, a second property or other chargeable assets, it may be worth reviewing whether you can make use of this year’s allowance before it expires.
Married couples and civil partners may also benefit from transferring assets between themselves, enabling both individuals to use their separate allowances where appropriate.
Consider pension contributions
Even if retirement is approaching or already underway, pensions can still offer valuable tax advantages.
Tax relief on pension contributions effectively boosts the amount invested. Many people can contribute up to £60,000 annually, subject to eligibility and earnings limits.
Even non-earners can usually contribute £2,880 and receive government tax relief, increasing the contribution to £3,600.
If you haven’t fully used your pension allowance this year, now may be a good time to review your position.
Check inheritance tax opportunities
If reducing the future inheritance tax burden on your family is a priority, the end of the tax year is a useful time to review gifting allowances.
You can usually give away up to £3,000 each tax year without it forming part of your estate for inheritance tax purposes. Smaller gifts of up to £250 per recipient may also qualify for exemption.
Keeping accurate records of gifts is essential should HMRC ever need evidence in the future.
Act before deadline day
Tax planning doesn’t have to be complicated. In many cases, making use of allowances you already have available can help preserve more of your wealth for yourself and your family.
Before 5 April, take the opportunity to review your ISAs, pensions, savings, investments and gifting arrangements. Once the tax year ends, many of these allowances disappear permanently, making advance planning one of the simplest ways to support your long-term financial position. Speak to a reputable accountant for personalised advice.
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