New Tax Year Checklist
The new tax year offers a fresh opportunity to optimise your finances and make the most of your money. From reviewing your existing investments to setting new goals, these tips will help you build wealth with confidence, and ensure you’re taking advantage of key allowances.
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ISA allowance: The maximum ISA allowance remains at £20,000. You can save and invest up to this amount across all ISA accounts.
Pension contributions: You can still save up to £60,000 across your pension pots this tax year. However, there’s a cap on contributions that attract tax relief, which will depend on your personal circumstances.
Capital Gains Tax (CGT) allowance: The CGT exemption is £3,000 for individuals. For the current 2025/26 tax year, remember that the rate of Capital Gains Tax is 18% for basic rate taxpayers and 24% for higher rate taxpayers. These rates increased from 10% and 20% respectively on 30th October 2024.
Dividend allowance: The dividend allowance is £500. Dividends exceeding this are taxed at 8.75% for basic rate taxpayers, 33.75% for higher rate taxpayers, and 39.35% for additional rate taxpayers.
Set new financial goals for 2025/26
Being proactive can help to put your hard-earned money to work and achieve your future goals. Small changes can make a big difference, so consider setting up a regular deposit. This consistent approach helps you reach your savings goals steadily.
Review your investments and changes to allowances
The start of the new tax year is a good time to adjust your investment portfolios to confirm they align with your financial goals and risk tolerance. You can also assess how any changes to allowances may impact you. It is also a good time to ensure you are taking advantage of the many products available to you.
Save up to 30% income tax with VCTs, EIS funds and Single Company EIS deals
Save up to 50% income tax with SEIS funds
Get tax-free income and growth with ISAs and up to 45% income tax relief with SIPPs (Self Invested Personal Pensions)
Potential for IHT relief on your ISA with AIM IHT ISAs.
Pensions offer significant tax breaks, allowing contributions up to £60,000 annually.
Build an emergency fund
Building an emergency fund is one of the smartest things you can do for your future peace of mind. An emergency fund is there to help you handle unexpected income changes, like redundancy, sudden medical bills, or urgent home repairs, and other unforeseen costs. You can even do this using a straightforward savings account which provides additional flexibility when it comes to withdrawals. Make sure that you shop around for savings accounts, especially if you already hace one in place. Most people keep the same savings accounts for years, but your introductory rate is likely to lapse, meaning your money isn’t working as hard as it could.
Check your tax code
Around 15% of taxpayers every year are thought to be on the wrong tax code – and that could mean you’re paying hundreds or even thousands more in tax every year. Or, worse, you’ve been underpaying tax and will need to have to repay when HMRC works it out. When they claw back underpaid tax, you’ll be left short on your usual pay cheques and living costs. Check the tax code on your P60, and also your April payslip to ensure it hasn’t changed. If it doesn’t seem right to you, alert your payroll as soon as possible. This will prevent under- or overpaid taxes from stacking up over the entire tax year.
Pay less tax with the marriage allowance
The marriage allowance can reduce your tax bill by up to £252 in the next tax year, so it’s worth considering. If you applied last year, this will happen again this year, however, if this isn’t something you’re taking advantage of yet, you can backdate it. This lets you shift some of your tax-free allowance over to your spouse if you earn less than £12,570 per year.
This article is for general information and does not constitute personal financial advice. If you’re unsure what’s best for you, seek independent financial advice.
