As the end of the 2025/26 fiscal year approaches, you may be wondering how you could maximise the allowances and reliefs that are available to reduce your tax liability. With the deadline of Sunday 5 April 2026 getting closer, it’s important to remember that if you don’t use many of the reliefs and allowances provided, you’ll lose them when the 2026/27 tax year starts.
That said, there are also several tax reliefs that can be carried over to the next tax year if you don’t take full advantage of them. Read on to discover two important tax reliefs and allowances that you can carry forward into the next tax year, and two that you can’t.
Let’s look at the allowances you can’t carry forward first.
Individual Savings Account allowances
As Individual Savings Accounts (ISAs) are not exposed to Income Tax, Dividend Tax or Capital Gains Tax (CGT), they provide an extremely tax-efficient way to save or invest your money. In 2025/26 you can place up to £20,000 into an ISA, however if you don’t use it, you lose it when the next tax year begins on Monday 6 April 2026.
While you can put money into a cash ISA, a Stocks and Shares ISA or a combination of both, you must not exceed the allowance in a single tax year. It’s also important to remember to use your Junior ISA (JISA) allowance if you have children or grandchildren, as this too is lost if you don’t use it.
The maximum you can contribute to a JISA in 2025/26 is £9,000, and you can use these tax-efficient accounts to place the money into cash savings, stocks and shares or spread your allowance between both.
Capital Gains Tax allowance
This is charged on the profit you make when you sell most assets, which may include a property other than your main residence, shares or art. In 2025/26 you’re allowed to make profits of up to £3,000, before Capital Gains Tax (CGT) is charged at 18% if you’re a basic rate taxpayer, or 24% if you’re a higher- or additional-rate taxpayer.
As you’re not permitted to carry any unused amounts of the allowance forward into the next tax year, it’s important to maximise it before 5 April if you’re selling assets. One way you might be able to do this is to consider selling some assets just before the tax year end, and the remainder at the start of the 2026/27 tax year.
This could allow you to use two different tax year’s CGT allowance in quick succession, which may allow you to make up to £6,000 in profit without any exposure to the tax.
Now that we have looked at two important taxes that you can’t carry forward into the next tax year, let’s look at two that you may be able to.
Annual Allowance
To encourage us to save for our retirement, the Government provides tax relief on pension contributions. This means that every £100 you place into your pension scheme could cost just:
- £80 if you’re a basic-rate taxpayer
- £60 if you’re a higher-rate taxpayer
- £55 if you’re an additional-rate taxpayer.
While you can contribute as much as you like into your pension during a tax year, the amount that enjoys tax relief is limited to your Annual Allowance. In 2025/26, this is £60,000 or 100% of your relevant UK earnings, whichever is lower.
Higher earners, with ‘adjusted income’ in excess of £260,000 may have their Annual Allowance reduced to a minimum of £10,000 under the ‘tapering’ rules. This is where the allowance is reduced, or tapered, by £1 for every £2 of income above this income limit.
It’s important to remember that adjusted income is your total taxable income, plus all pension contributions made by you or your employer. Non-earners are able to contribute a maximum of £2,880, which is topped up to £3,600 by the government.
If you do not use all of your allowance in 2025/26, you may be able to utilise the outstanding amounts in 2026/27 under the ‘carry forward’ rules. This allows you to potentially use the amount of Annual Allowance that you didn’t utilise in the previous three years.
As a result, you may be able to contribute up to £240,000 in 2026/27 and still receive tax relief. That said, strict regulations apply to carry forward, so it’s important to speak to a financial adviser to ensure it’s right for you and that you don’t inadvertently fall foul of the rules.
If you do breach the carry forward rules, you may face an unexpected, and significant tax charge.
Inheritance Tax gifts
When you die, the value of any assets you own that exceeds your Nil-Rate Band (NRB) is typically liable to Inheritance Tax (IHT). Your NRB is the amount you’re allowed to pass on from your estate upon death before IHT becomes chargeable, usually at 40%.
In 2025, the Chancellor, Rachel Reeves, froze the NRB at £325,000 per person until April 2031, however you may be able to combine your tax-free amount with your spouse or civil partner. This means your total NRB combined could be £650,000, and if you intend to leave your home to a direct descendant, this could rise to £1 million, taking into account the Residence Nil-Rate Band (RNRB). This provides an extra £175,000 tax-free allowance per person for a main residence.
What you may not realise, however, is that HM Revenue & Customs allows you to make certain gifts every tax year so that you can reduce your estate’s value, and with it, any exposure to IHT.
This includes a £3,000 gift that can be given to one person or divided between many, and if you don’t use all of this amount, you might be able to carry the unused amount forward to the following tax year.
As such, you may be able to give away up to £6,000 in 2026/27. Furthermore, if you live with someone you could gift a combined total of up to £12,000. Please note that this is not a complete list of the gifts you could make to reduce your IHT liability.
The tax year end is an important time
While we hope this blog provides useful information, please remember that the tax year end is an important time when it comes to financial planning. It provides an excellent opportunity to ensure your money and wider wealth is as tax-efficient as possible and is a good time to reassess your priorities and investment performance.
Get in touch
If you would like to discuss ways to improve your tax efficiency and get the most from the tax year end, please call us on 0333 010 0008. We’d be happy to arrange a no-obligation initial meeting with one of our independent financial advisers.
20 February 2026