7 Allowances to Use Before 5 April 2026
As the 2025/26 tax year draws to a close, many valuable allowances will reset on 6 April 2026. If unused, some of these allowances are lost forever.
Making strategic use of your allowances before the deadline could reduce your tax bill, protect your wealth, and strengthen your long-term financial plan.
Here are the key opportunities to consider before 5 April 2026.
1. ISA Allowance – £20,000
You can contribute up to £20,000 across your ISAs in 2025/26.
ISAs remain one of the most tax-efficient wrappers available:
- No Income Tax on interest
- No Capital Gains Tax on investment growth
- No further tax on withdrawals
There are several types available, including Cash ISAs, Stocks and Shares ISAs, Lifetime ISAs, and Innovative Finance ISAs.
From April 2027, changes will limit how much under-65s can contribute to Cash ISAs. Planning ahead may help you maximise flexibility while current rules apply.
2. Junior ISA Allowance – £9,000
If you’re saving for a child or grandchild, you can contribute £9,000 per child in 2025/26.
Growth is free from Income Tax and Capital Gains Tax, and funds become accessible when the child turns 18.
If your child has a Child Trust Fund, you may wish to review whether transferring to a Junior ISA would be beneficial.
3. Dividend Allowance – £500
If you receive dividends outside of an ISA, you can earn £500 tax-free in 2025/26.
Dividend tax rates are set to rise from April 2026 for basic and higher-rate taxpayers. This makes reviewing dividend strategy particularly important before the tax year ends.
4. Capital Gains Tax Annual Exempt Amount – £3,000
When selling investments outside tax-efficient wrappers, you can realise gains of up to £3,000 before CGT applies.
The allowance cannot be carried forward. Strategic disposals before 5 April may reduce future tax liabilities.
Current CGT rates are:
- 18% (lower rate)
- 24% (higher rate)
5. Marriage Allowance – Transfer £1,260
If one spouse or civil partner earns below the Personal Allowance (£12,570), they may transfer £1,260 of unused allowance to their partner.
This could reduce your tax bill by up to £252 in 2025/26.
You can also backdate claims for up to four years — but the deadline to claim for 2021/22 is 5 April 2026.
6. Pension Annual Allowance – £60,000
The pension Annual Allowance for 2025/26 is £60,000.
Contributions benefit from tax relief, and you may be able to carry forward unused allowance from the previous three tax years.
However, higher earners and those who have flexibly accessed pensions may face reduced allowances.
With pensions offering powerful tax advantages, reviewing contributions before year-end can be highly valuable.
7. Inheritance Tax Annual Exemption – £3,000
You can gift £3,000 per tax year without it forming part of your estate for Inheritance Tax purposes.
Couples may gift £6,000, and if last year’s exemption was unused, potentially £12,000.
Early estate planning can significantly reduce a future Inheritance Tax liability.
Why planning now matters
Many allowances are “use it or lose it.” With tax thresholds frozen and some tax rates increasing, proactive planning is more important than ever.
Rather than rushing at the end of the tax year, building a structured financial plan can help you:
- Reduce unnecessary tax
- Improve long-term investment growth
- Protect your estate
- Align allowances with your goals
Download the full guide
This article highlights just some of the tax opportunities available before the end of the 2025/26 tax year.
To explore all 7 key allowances in detail, including important rule changes and planning considerations, download our full guide:
“7 Key Allowances You Might Want to Use Before the End of the 2025/26 Tax Year.”
If you would like personalised advice on how these allowances fit into your financial plan, please contact Innes Reid.
Talk to us
If you are new to financial planning and have any questions about your tax allowances do not hesitate to contact our team. We provide a free initial meeting worth up to £300 with one of our trusted, independent financial planners.
Call our team: 01244 347 583 | Send an email: info@innesreid.co.uk | Send a message
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Please note: This article is for general information only and does not constitute financial
advice, which should be based on your individual circumstances. The information is
aimed at individuals only.
All information is based on our current understanding of legislation and correct at the
time of writing (January 2026), and is subject to change in the future.
The Financial Conduct Authority does not regulate tax planning.
