Everything You Need to Do Before April 6th

Summary

With the new UK financial year approaching on April 6, 2026, this video outlines key allowances and tax considerations to review before deadlines reset. It covers maximizing your £20,000 ISA allowance, pension annual allowances and carry forward rules, claiming higher-rate pension tax relief, and checking your National Insurance record to protect your state pension. It also highlights reviewing your tax code, using capital gains and dividend allowances strategically, and understanding savings interest limits. The core message is simple: many allowances are “use it or lose it,” and acting before the tax year ends could save you significant money.

Takeaways

• 😀 Your ISA allowance resets every tax year (April 6th), and if you don’t use it by April 5th, you lose it forever.
• 😀 You can contribute up to £20,000 across various types of ISAs (cash, stocks and shares, lifetime, innovative finance).
• 😀 ISAs provide tax-free gains, meaning no tax on interest or capital gains from investments.
• 😀 There are changes coming to cash ISAs: if you're under 65, the limit may drop from £20,000 to £12,000.
• 😀 You can transfer funds between ISAs without affecting your allowance, so feel free to move money around between different types of ISAs.
• 😀 You can open as many ISAs as you want, even though many people still think there's a limit on how many you can have.
• 😀 Junior ISAs offer a £9,000 allowance per year, and you can also use your partner's allowance to increase your household contributions.
• 😀 Pensions are also reset every tax year. You can contribute up to £60,000 annually, including tax relief and employer contributions.
• 😀 Higher and additional rate taxpayers can claim extra tax relief on pensions, and you can backdate claims for up to 4 years.
• 😀 The 'carry forward' rule lets you contribute to your pension from previous tax years, potentially contributing up to £240,000 in total if you max out each year.
• 😀 Check your National Insurance record before April 6th to ensure you're on track for a full state pension, and you can purchase missing qualifying years if needed.
• 😀 Review your tax code and pay slip each year to ensure you're not overpaying or underpaying tax. Mistakes can lead to refunds or future charges.
• 😀 There are capital gains, dividend, and savings interest allowances that reset each year—be mindful of using them before the new tax year begins.
• 😀 The capital gains tax-free allowance is currently £3,000 per person, and you can plan sales of investments across two tax years to use up two years’ worth of allowances.
• 😀 The dividends allowance is £500, so if you earn more than this, you’ll pay tax on dividends. It's important to plan dividends before the end of the tax year.
• 😀 You can avoid paying taxes on dividends and capital gains by holding investments in ISAs and pensions, making these accounts especially tax-efficient.

Q & A

What happens to the ISA allowance when the new tax year starts?

The ISA allowance resets every tax year. For the 2026/2027 financial year, UK adults will have a new £20,000 allowance, which includes Cash ISAs, Stocks and Shares ISAs, Lifetime ISAs, and Innovative Finance ISAs. If you don’t use the full £20,000 allowance by April 5, 2026, you lose the opportunity to use it for this year.

Can I transfer money between different types of ISAs?

Yes, you can transfer money between different types of ISAs, and it doesn’t count toward your annual allowance. For example, if you transfer £10,000 from a Cash ISA to a Stocks and Shares ISA, that £10,000 doesn’t count as part of your £20,000 ISA limit.

What is the new change to Cash ISAs for those under 65?

The government plans to reduce the annual Cash ISA limit from £20,000 to £12,000 for those under 65. However, this change is still in discussion, and more details will be provided once the changes are confirmed.

What is the carry-forward rule for pensions?

The carry-forward rule allows you to contribute to your pension for up to the last four tax years if you haven't used your full annual allowance in previous years. This can allow you to contribute up to £240,000 in total across five years, including the current year’s allowance.

How can I check if I am missing National Insurance contributions?

You can check your National Insurance record by logging into your HMRC portal. If you find gaps in your contributions, you can purchase qualifying years going back up to six years to ensure you receive the full state pension.

What should I look for when reviewing my pay slip and tax code?

You should check that your tax code matches what is listed in your HMRC account. If your tax code changes unexpectedly, it’s important to understand why. Look out for K codes, which indicate unpaid taxes, or emergency tax codes that may be incorrect.

What is the capital gains allowance for the new tax year?

The capital gains allowance has been reduced to £3,000 per person for the new tax year. If you sell assets such as shares or property, you can make up to £3,000 in profit without paying tax. Any profit above this amount will be taxable.

How can I use two years' worth of capital gains allowances?

You can strategically split capital gains sales across two tax years to take advantage of both years' £3,000 allowances. For example, if you sell £5,000 worth of gains in one tax year and another £5,000 in the next, you can use £6,000 in allowances.

What changes are there to dividend tax allowances for the next tax year?

The dividend tax allowance has been reduced to £500 for the next tax year. If you exceed this amount, you will be taxed on the excess dividends. The tax rates for dividends will also increase for higher-rate taxpayers.

How does the savings interest allowance work?

The savings interest allowance depends on your income. If you're a basic-rate taxpayer, you can earn up to £1,000 in tax-free interest on savings. However, if you're a higher-rate taxpayer, your allowance drops to £500, and additional-rate taxpayers have no tax-free interest allowance.