Year-end housekeeping for
5 April 2026

Introduction

With the end of the current tax year (5 April 2026) fast approaching, we have outlined below some of the main things that individuals, entrepreneurs and their families should look at ahead of the tax year end, to ensure that their personal tax affairs are in good order and all available tax allowances and exemptions are utilised.

• • Income tax
  • Pensions
  • Capital Gains Tax (CGT)
  • Using current year exemptions and allowances
  • Individuals within their first four tax years of UK residence
  • Individuals who used the remittance basis
  • Inheritance tax
  • Tax administration

Income tax

In 2025/26 individuals with total income in excess of £125,140 pay the additional rate of income tax, currently 45% on most income, (48% in Scotland), although certain individuals with income between £100,000 and £125,140 are subject to an effective 60% tax rate (67.5% in Scotland) owing to the tapered removal of the personal allowance. Some options for consideration are outlined below; please contact us if you require assistance in this area.

Transferring assets to spouse or civil partner

If your spouse or civil partner has insufficient income to utilise their personal allowance (£12,570 for 2025/26) or their nil, basic or higher rate tax bands, it may be sensible for you to gift sufficient income-producing assets to them to enable them to do so.

Calculating the effect of the transfer of income-producing assets can be complex, due to the interaction of the savings rate of tax, the savings and dividend nil rate bands and the withdrawal of the personal allowance from those with income of over £100,000. Furthermore, different tax rates apply to non-savings, non-dividend income of Scottish resident taxpayers, which would also need to be taken into account if relevant. The wider implications of making gifts to your spouse or civil partner must also be considered.

Jointly owned rental properties

If a rental property is held in joint names of spouses or civil partners, 50% of the net rental income (income after allowable expenses) is taxable on each individual. If shares in the property are owned unequally it is possible to submit a form to HMRC (Form 17) so that the individuals are each taxable on their actual income entitlement. This declaration cannot be backdated, so could be made now to apply to future income.

Preserving your personal allowance

Where your income is between £100,000 and £125,140 (for 2025/26), your personal allowance is phased out, resulting in an effective rate of tax of up to 60% (67.5% for Scottish residents) within this income bracket. Taxable income can be reduced through pension contributions (subject to restrictions set out later in this note) and charitable donations. The wider implications of making such contributions and donations should be considered.

Charitable donations

Tax relief is available for cash gifts to UK registered charities.

If a 45% taxpayer makes a cash donation to a charity of £20,000 under the ‘Gift Aid’ scheme, the charity may reclaim £5,000 from HM Revenue & Customs (HMRC) and the donor will obtain tax relief of £6,250 via their tax return. The overall effect is that the charity receives a £25,000 donation at a net cost to the donor of £13,750.

Tax relief may be available for certain charitable donations not made in cash form, but you should review this with your usual Deloitte contact to ensure that any tax relief is claimed appropriately.

Are your investments held in a sensible structure?

The application of corporation, income and Capital Gains Tax (CGT) rates depend on how you own your investments:

• The main rate of corporation tax rate is currently 25%. Small companies may be taxed at an effective rate of between 19% and 25%.
• The additional rate of income tax is 45% for most income (48% in Scotland), and 39.35% for dividends after the £500 dividend nil rate band (2025/26). On 6 April the dividend rate will increase by 2% for basic and higher rate taxpayers, to 10.75% and 35.75% respectively.

CGT applies to gains realised in excess of the annual exemption, which is £3,000 in 2025/26..

With this in mind, you should review how your investments are currently structured, taking into account the overall net effective rates of tax on investment returns, now and in the future.

When choosing the right investment vehicle, there are numerous tax and wider considerations to consider. Similar issues apply in respect of any income received from self-employment. The most appropriate vehicle will be largely driven by your circumstances and intentions, and so the position should be reviewed with your usual Deloitte contact.

Pensions

Fully utilising annual pension contributions

The amount of tax-efficient pension savings that can be made for each individual is limited to the lower of their “relevant UK earnings” and their “annual allowance”. The standard annual allowance increased from £40,000 to £60,000 from 6 April 2023. The allowance is reduced by £1 for every additional £2 of income above £260,000 in 2023/24 onwards (£240,000 for 2022/23), subject to a minimum allowance of £10,000 from 2023/24 onwards (£4,000 for 2022/23). Income for this purpose is taxable income plus most pension savings by the individual and/or their employer.

Where pension savings for the last three years have been lower than the annual allowance for the relevant year, there may be scope for catching up on pension savings in the current year. For example in 2025/26 unused allowances from 2022/23 onwards could be used. The allowances will be available if the individual was a member of a UK registered scheme in the relevant tax year (this may in some circumstances be extended to membership of overseas pension schemes). In some cases, contributions of up to £220,000 could attract tax relief in 2025/26, but the rules surrounding this are complex. You should review the position with your usual Deloitte contact and take financial advice from a FCA regulated pensions adviser before making any contributions. A separate briefing note is available on request.

Capital Gains Tax (CGT)

Claiming tax relief for capital losses

Capital losses must be claimed within four years of the end of the tax year in which the loss is realised. The deadline for claiming capital losses realised in 2021/22 is 5 April 2026. Claims are generally made as part of tax returns, but it is important to consider whether you may have any unclaimed losses (this is particularly relevant to individuals who paid tax on the remittance basis – further information on this is set out below). In addition, a capital loss claim may be possible if you own assets or investments which have fallen in value and are now worthless, or if you have made loans to a trading company (or other trader) which have become irrecoverable. For loans made before 24 January 2019, relief on irrecoverable loans is only available if the borrower is UK resident.

Where a capital loss relates to shares in an unquoted trading company, it may be possible to offset the loss against income which would otherwise be subject to income tax at up to 45% (or 48% for Scottish residents). The loss that can be offset in this way is typically capped at the higher of £50,000 or 25% adjusted total income.

The conditions to claim a loss and the claim itself can be complicated and so you should discuss this with your usual Deloitte contact.

Business Asset Disposal Relief (BADR)

A 14% CGT rate can apply to capital gains that qualify for BADR in 2025/26 (rising to 18% from 6 April 2026). BADR can be claimed on a maximum of £1million of gains in a lifetime.

If you have business assets or shares or loan notes in a trading company, you should review your personal tax position as soon as possible to determine whether BADR is available. Various conditions apply. For shares these are, very broadly, that you must own at least 5% of the ordinary share capital in a trading company and hold an employment or office in the company for at least 24 months before disposal. BADR can also apply to sales of unincorporated trading businesses and furnished holiday lets. The detailed conditions are complex and should be reviewed carefully.

Investors’ relief

Similarly to BADR, investors’ relief results in a 14% CGT rate in 2025/26 (rising to 18% from 6 April 2026) on up to £1million of qualifying gains in a lifetime.

Investors’ relief is available to individuals who subscribed for ordinary shares in an unlisted trading company, in cash, on or after 17 March 2016 and have owned the shares for at least three years, provided the requisite conditions are met. These include the individual being neither an employee nor paid director, although the detailed conditions are complex and should be reviewed carefully.

Use your CGT annual exemption

In 2025/26 individuals have a £3,000 annual exemption. If it is not used, it cannot be carried forward and is lost. If the annual exemption has not been used, consideration could be given to selling assets to realise gains if this is consistent with your overall investment strategy. However, anti-avoidance rules mean that if shares or securities are sold and repurchased on the same day, or within the following 30 days, the disposal will be matched with the later acquisition when calculating the gain.

Gift to spouse or civil partner prior to a disposal

Assets can usually be transferred between spouses and civil partners without a tax charge arising on the transfer. If an asset standing at a gain is transferred to a spouse before disposal, the gain on disposal may be covered by their CGT annual exemption, their capital losses (if any), and/or attract an 18% CGT rate if the spouse or civil partner is a basic rate taxpayer, rather than the 24% CGT rate that can apply for higher or additional rate taxpayers (NB: a 32% CGT rate applies to carried interest gains in 2025/26). In order for this to be effective, any gift of assets must be absolute and unconditional. If the transfer is from a UK domiciled individual to their non-UK domiciled spouse or civil partner, it should be borne in mind that the inheritance tax spouse exemption in such circumstances is capped, and so the gift may be a potentially exempt transfer for inheritance tax purposes.

Main residence relief

Normally where a property is used as the owner’s only or main residence throughout the ownership period, any gain on disposal is exempt from CGT. Married couples and civil partners can only have one main residence between them. If more than one property is used as a residence by an individual or couple, it is possible to elect which one should be treated as the main residence for CGT purposes.

UK resident individuals must make the election within two years of the residences available to an individual changing (e.g. within two years of a new property being acquired). Individuals who are non-UK resident at the point of disposal of the residence can make a main residence election at the point of disposal, though it is often advisable for non-UK residents to make a main residence election within the usual two-year time limit in case their circumstances change and they become UK resident at the point of disposal, in which case it would be too late to make an election.

It should be noted that rental properties on which a capital gain is unlikely to arise may constitute a “residence” for the tenant. This should be borne in mind when considering whether or not a main residence election is appropriate.

Additional rules apply if the property is located in a different jurisdiction from the one in which the taxpayer resides. Broadly, taxpayers must occupy the elected property as a residence for at least 90 days in the tax year in order for it to qualify for relief in respect of that year. These rules are complex and those in this situation should take professional advice at the earliest opportunity.

UK residential property disposals – standalone tax return requirement

UK residents who realise a taxable gain on disposal of UK residential property are generally required to file a standalone CGT return and make a payment on account of the CGT due within 60 days of completion. The payment on account will normally be the full expected CGT liability but may exceed it in some cases as only losses incurred up to the date of disposal of the property can be offset against the gain arising when the standalone return is filed.

Losses incurred after the date of completion must be ignored in determining the CGT payment on account, even if they will ultimately be offset on the self-assessment tax return for the tax year of disposal. Any excess CGT will generally be repayable when the self-assessment tax return is filed. Interest and penalties may apply if returns are not submitted and/or insufficient payments are made. A separate briefing note is available at https://deloi.tt/CGT2020.

Non-Resident Capital Gains Tax (NRCGT)

Any gains realised by non-UK resident individuals and trustees who dispose of UK residential and/or non-residential property (including that held indirectly) are within the scope of CGT. Rebasing to 5 April 2015 or 2019 values (depending on the type of property being disposed of) may apply. Each disposal must be reported on a standalone CGT return within 60 days of the date of completion, irrespective of whether there is a taxable gain, subject to some very limited exceptions. Any CGT due will normally need to be paid within the same 60-day period.

Using other current year exemptions and allowances

The main exemptions and allowances not already mentioned in this briefing note are set out below.

Inheritance tax annual exemption of £3,000 per annum

This is the amount individuals can give away each tax year without any inheritance tax implications. If all or part of the previous tax year’s (2024/25) £3,000 annual exemption was unused the remainder can be carried forward. This means that up to £6,000 can be given away tax-free in 2025/26. Other reliefs and exemptions may also be relevant.

Stakeholder pensions of £3,600 per annum (gross)

Any UK resident individual under the age of 75 can contribute up to £2,880 (net) into a stakeholder pension each year, irrespective of their earnings or whether or not they are employed, so these pensions can be funded for non-working spouses and children. The pension provider will reclaim 20% tax relief direct from HMRC, so the policy will be credited with a gross contribution of £3,600. Pension funds will not be accessible until the minimum pension age. This is currently 55 and will increase to 57 on 6 April 2028.

Individual Savings Accounts (ISAs)

The annual ISA subscription limit for 2025/26 is £20,000. This can be invested in cash, UK stocks and shares, foreign shares, corporate bonds and other permitted investments. ISAs are available to UK resident individuals aged 18 or over. Investment returns from ISAs are free from income tax and CGT.

Other types of ISA exist, including the Innovative Finance ISA and the Lifetime ISA. The annual investment limit applies across all ISAs in total. It is important to be aware of the conditions and features of the various ISAs before investing to ensure that the appropriate ISA vehicle is used for your specific circumstances. A comparison with saving into a pension is also important. Regulated financial advice may be required.

Junior ISAs

Junior ISAs are available to children under the age of 18 who are UK resident and who do not have a child trust fund. The annual subscription limit in 2025/26 is £9,000, which can be split between stocks and shares and/or cash. The funds are locked in until the child is 18, when the account will default to a normal ISA if the funds are not withdrawn. Ordinarily, when a parent gives money to a child, if the income arising from the gift exceeds £100, the whole of the income is taxable on the parent (while the child is under 18). This provision does not apply to a Junior ISA.

Tax efficient investments

Numerous statutorily provided tax efficient investments are available, including National Savings (www.nsandi.com), the Enterprise Investment Scheme (EIS), Seed Enterprise Investment Scheme (SEIS) and Venture Capital Trusts (VCTs).

EIS, SEIS and VCT investments all have annual limits, as follows:

• EIS - £1,000,000 with income tax relief of 30%, or up to £2,000,000 provided the additional £1,000,000 is invested in ‘knowledge-intensive’ companies.
• SEIS - £200,000 with income tax relief of 50%.
• VCT - £200,000 with income tax relief of 30% (reducing to 20% for investments made after 5 April 2026).

As the rate of VCT income tax relief will reduce from 6 April 2026, individuals who are considering making a VCT investment should consider doing so before 6 April 2026.

Any gains realised on disposal of EIS, SEIS or VCT shares may be exempt from CGT. In addition, gains made on disposal of other assets may be deferred if EIS investments are made or partially exempted if SEIS investments are made.  

The EIS, SEIS and VCT tax rules are complicated and it is important to take professional advice. Regulated financial advice may also be required.

Individuals within their first four tax years of UK residence

Individuals within the first four tax years of their arrival to the UK may be eligible for relief from UK taxation on most foreign income and gains – this is called the ‘FIG regime’. Conditions must be met, including having been non-UK resident throughout the ten tax years immediately preceding the first tax year of UK residence being considered under this regime. 2025/26 is the first tax year for which the FIG regime is available, and it can apply to individuals who commenced UK residence in 2022/23 or later. Individuals who are eligible for the regime may wish to consider where investments etc. are held and, if overseas, if relief under the FIG regime is available.

Individuals who used the remittance basis

The remittance basis was abolished with effect from 6 April 2025. This means that it can no longer be claimed, though previously unremitted foreign income and gains to which the remittance basis applied continue to be taxable if remitted. During 2025/26 and 2026/27 it is possible to designate amounts as being subject to a flat 12% tax rate under the temporary repatriation facility (TRF) and no further tax would apply on remittances. A 15% tax rate will apply to 2027/28 designations. Conditions must be met in order for the TRF to be available, including being UK resident in the tax year of designation. This is a complicated area so please contact your usual Deloitte contact if this is of interest.   

A separate point that is relevant to individuals who used the remittance basis is that, if the remittance basis was claimed (i.e. it did not apply automatically), relief for foreign capital losses is only available if an election is made, and those losses must be claimed. The deadline for the election is four years from the end of the tax year in which the remittance basis was first claimed. The deadline for making a loss election if the remittance basis was first claimed in 2021/22 is 5 April 2026. The deadline for claiming any foreign capital losses realised in 2021/22 is also 5 April 2026.  

Inheritance Tax (IHT)

Scope of inheritance tax

From 6 April 2025, a new residence-based system of IHT applies under which individuals who are long-term UK resident are within the scope of IHT on worldwide assets whereas individuals who are not long-term UK resident are only within the scope of IHT on UK assets and certain foreign assets that derive value from UK residential or agricultural property.

The general rule is that individuals are long-term UK resident if they have been UK resident for 10 of the previous 20 tax years, though shorter periods can apply for individuals who cease UK residence and are non-UK resident continuously. Exceptions also apply in limited circumstances for individuals who were non-UK domiciled before 30 October 2024 and who have not been UK resident in 2025/26 or a later tax year. Different rules apply to individuals under 20.

With the exception of the above-mentioned transitional rules, domicile is no longer relevant to an individual’s IHT position. This means that individuals who are legally UK domiciled cease being within the scope of IHT on most non-UK assets if they cease being long-term UK resident.

In addition to personally owned assets, long-term residence is also relevant to trusts. Broadly, the extent to which trustees of “relevant property trusts” (most trusts set up in lifetime and some trusts set up on death) are within the scope of follows the long-term residence position of the settlor. IHT charges can arise if a long-term resident settlor ceases being long-term resident, so care should be taken in this regard.   

IHT charges

In general, 40% IHT is payable on the value of the estate on death, subject to any relief or exemptions available. Gifts made within the seven years preceding death may also be taken into account. IHT charges at a rate of 20% can apply to lifetime gifts into trust, with further tax being payable if death occurs within seven years. IHT charges can be reduced by reliefs and exemptions such as the £3,000 annual exemption and the exemption for gifts made out of income as part of a normal pattern of expenditure where the donor retains sufficient income to maintain their normal standard of living after the gift. Where relevant, it is recommended that the intention to make regular gifts out of income is documented from the outset of the arrangements and that appropriate records are maintained.

On a more general level, it is important to review any lifetime planning and your will at regular intervals to ensure that they continue to meet your objectives for succession and are appropriate in the light of current legislation. You should also ensure that the conditions for any available reliefs or exemptions (for example business property relief on unquoted shares) are met. Particular rules apply to couples where one spouse or civil partner is long-term UK resident and the other is not. The detailed IHT rules are beyond the scope of this note, but should you require assistance in this area please speak to your usual Deloitte contact.

Tax administration

Keep adequate records

It is important to be able to substantiate tax return entries with underlying records, particularly in the event of an enquiry. Depending on the source of income or gains, there is a requirement to retain underlying records for up to 5 years from the 31 January following the tax year. HMRC have up to 12 years to raise assessments relating to offshore matters. The time limit for cases where deliberate errors were made remains 20 years.

Common Reporting Standard (CRS) and trusts

HMRC receives information from foreign jurisdictions under the CRS. The CRS requires Financial Institutions (as defined) to report financial account information relating to residents of participating jurisdictions so that this can be exchanged between the relevant jurisdictions. Professionally managed trusts which derive income primarily from financial assets are likely to come within the definition of Financial Institution. UK resident trusts which are Financial Institutions will need to review their Account Holders (mainly the settlor and beneficiaries of the trust) and report the necessary information to HMRC by 31 May 2025 (see here). In certain cases trustees are required to make a one-off registration with HMRC (as this is a one-off, trustees that have already registered with HMRC do not need to reregister).

In some cases, additional rules may apply if trustees own cryptoassets and/or if US FATCA is relevant. 

Time limits

A number of claims and elections relating to the 2021/22 tax year have a time limit of 5 April 2026 and so need to be considered before that date. In addition to the points included above relief for tax overpaid in 2021/22 must be claimed by 5 April 2026. The most likely scenario in which this could occur is for those taxed under PAYE, where the PAYE deductions are excessive, although overpayments could arise in other cases.