As the end of the tax year approaches, many people begin to think about allowances, deadlines, and how to make sure they are not paying more tax than necessary. But tax planning shouldn’t just be a once-a-year exercise. A well-structured, regularly reviewed tax plan can help you retain more of your wealth, navigate legislative changes, and prepare confidently for major life milestones.
From the 2025 Autumn Budget to the forthcoming shifts in dividend, savings and property tax rates, the landscape is moving rapidly. Taking a proactive approach now can offer clarity, stability and financial peace of mind—whatever the future holds.
Why Having a Tax Plan Matters
A good tax plan doesn’t try to avoid tax; it aims to ensure you are paying the right amount—no more and no less. The UK tax system is complex and frequently updated, meaning opportunities to save tax can easily be missed without regular reviews.
An effective plan:
- Helps reduce tax liabilities within the rules set by HMRC
- Brings clarity to your financial world
- Offers stability through policy changes
- Ensures your actions are aligned with long-term goals such as retirement or passing on wealth
Tax planning is ultimately about being intentional with your money—not reactive.
Keep More of Your Hard-Earned Money
One of the clearest benefits of tax planning is the potential to retain more of your income and assets.
Some individuals—particularly higher earners—can be affected by the so-called “60% tax trap” where the withdrawal of the personal allowance dramatically increases the marginal rate of tax. Planning ahead can help identify ways to reduce exposure, bring your effective rate back down, and potentially unlock other entitlements such as tax-free childcare, depending on your circumstances.
For the self-employed, reclaiming allowable business expenses can meaningfully reduce taxable income. Those who have moved abroad may also benefit from reviewing how different jurisdictions interact, whether existing UK allowances apply, and whether any double-tax treaty provisions may help prevent being taxed twice.
Tax planning is especially effective when considered at a household level. Spouses or civil partners may be able to transfer certain allowances, rebalance ownership of assets, or strategically use personal tax bands to reduce overall liabilities—always within HMRC rules.
Upcoming changes also matter. From April 2028, the mansion tax will take effect, and from April 2026 the two-percentage-point rise on dividends, savings income and property income will begin. Updating your tax strategy ahead of these shifts can help you stay resilient and avoid last-minute decisions.
Boost Your Savings and Investments
Tax-efficient investing is one of the cornerstones of long-term wealth building. A good tax plan will examine which allowances you are using, which remain unused, and how different tools can work together to improve outcomes.
Understanding ISA opportunities
Every adult currently has an annual £20,000 ISA allowance. This can be split between cash, stocks and shares, and innovative ISAs depending on your goals.
However, from April 2027, the cash ISA limit for those under 65 will fall to £12,000, while the overall £20,000 allowance will remain unchanged. Those aged 65+ are unaffected by the change.
Younger savers can also open a Lifetime ISA (LISA), offering a 25% government bonus on contributions of up to £4,000 each year. While the government may reform the LISA in the future, it currently remains a valuable tool for first-time buyers and long-term savers.
Parents can additionally use Junior ISAs, enabling up to £9,000 a year to be invested tax-efficiently for a child’s future.
Planning outside ISAs
Not all assets sit within tax-sheltered wrappers, which is where careful planning really counts. Depending on your circumstances, you may be able to use:
- The personal savings allowance
- The dividend allowance
- The capital gains tax (CGT) exempt amount
- Inter-spousal transfers to make use of both partners’ allowances and tax bands
Although the CGT threshold has been reduced to £3,000, couples can potentially achieve gains of up to £6,000 tax-free between them. Timing also matters—spreading asset sales across multiple tax years can help reduce CGT.
A comprehensive tax plan ensures these allowances are coordinated, not treated in isolation.
Prepare for a Tax-Efficient Retirement
Retirement planning is one of the most significant financial undertakings in life, and tax considerations sit at its core.
Pensions remain one of the most tax-efficient ways to save for the future. Contributions may benefit from tax relief, while investments inside a pension grow free from UK income and capital gains tax. However, the rules are intricate—from annual contribution limits to how benefits are taxed later on—so a structured plan is essential.
From April 2029, the National Insurance exemption on salary-sacrifice pension contributions will be capped at £2,000 a year. Understanding how this affects take-home pay and long-term retirement funding is vital, and your tax plan can help identify alternative strategies if necessary.
Many people rely not just on pensions but also on ISAs, investment portfolios and property to fund later life. Coordinating withdrawals from different sources—while considering tax bands, allowances and longevity—can help create a smoother and more efficient retirement income.
Passing Wealth to the Next Generation
Tax planning is also a tool for shaping your legacy. With the inheritance tax (IHT) nil-rate band frozen at £325,000 and property values continuing to rise, more families are becoming affected by IHT.
A forward-looking plan may consider:
- Making lifetime gifts
- Establishing trusts where appropriate
- Using life insurance to help cover expected IHT liabilities
- Reviewing how pensions fit into the estate—especially as accumulated pension funds will become subject to IHT from April 2027
Good planning helps ensure more of your wealth goes to the people and causes you care about.
Take Control of Your Future
Tax is part of life—but overpaying it doesn’t have to be. A well-structured tax plan brings clarity, confidence and peace of mind, allowing you to focus on your goals rather than last-minute deadlines or unexpected rule changes.
If you would like guidance on building a tax-efficient strategy aligned with your personal circumstances—whether you live in the UK or abroad—our advisers can help you understand your options and stay prepared for the future.
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This communication is for informational purposes only and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.
Blacktower Financial Management is authorised and regulated by the Financial Conduct Authority