The tax year ends on 5 April, but the smart moves on capital gains, ISAs and pensions are easier made months earlier. Here is what to check and why.
Every March, a large number of sensible men discover they have about ten days to sort out a year’s worth of tax decisions. Platforms set early cut-offs, providers get swamped and you end up rushing a share sale at the worst possible moment.
The UK tax year ends on 5 April, and three things are worth looking at well before then: capital gains and losses, moving investments into an ISA, and topping up your pension. None of it is glamorous. Done properly, it can save you a few thousand pounds.
Probably more than you expect, because the free allowance has been cut to almost nothing. The capital gains tax annual exempt amount is £3,000 for the 2025/26 tax year. As recently as 2022/23 it was £12,300.
Gains above that on shares and funds held outside an ISA or pension are taxed at 18% if they fall within your basic-rate band and 24% above it. Those rates have applied since 30 October 2024. They are the same across the UK. Capital gains tax uses the UK income tax bands, even in Scotland.
A worked example: you’re a higher-rate taxpayer and you sell a fund with a £10,000 gain. The first £3,000 is tax-free. The other £7,000 is taxed at 24%, so you owe £1,680.
Now say you’d sold half of it this tax year and half after 6 April. Each £5,000 gain uses a fresh £3,000 allowance, so only £2,000 is taxable each time. Your total bill falls to £960. All you changed was the timing.
If you’re married or in a civil partnership and live together, you can transfer assets to each other without triggering a gain. The person who receives the shares can then sell them using their own £3,000 allowance, and their own tax band if it’s lower. Between you, that’s £6,000 of gains a year that you can realise tax-free.
Yes, and this is the part most people forget. If you sell something for less than you paid, that loss is set against your gains in the same tax year.
The catch is that same-year losses have to be used in full, even if that wipes out gains your £3,000 allowance would have covered anyway. Losses brought forward from earlier years are more flexible. They only reduce your gains down to the allowance, so the rest stays available for future years.
So timing matters. Say you have a £5,000 gain on one holding and a £4,000 paper loss on another. If you sell both in the same tax year, your net gain is £1,000, which is well inside the allowance. If you sell the loser after 5 April instead, you may pay tax on the gain now and have a loss you can’t use until later.
Losses don’t count automatically. You have to report them to HMRC, and the deadline is four years from the end of the tax year in which you made the loss. If an old investment went badly a few years ago and you never told HMRC, check whether you’re still in time.
One trap: if you sell shares and buy the same ones back within 30 days in the same account, HMRC treats the sale as matched with the new purchase. That cancels out the gain or loss you were trying to create. The old trick of selling on Friday and buying back on Monday stopped working decades ago.
The tax allowance is small now, but it resets on 6 April whether you’ve used it or not. Any part you leave unused is gone for good.
A bed and ISA means selling shares or funds you hold in an ordinary dealing account and buying them straight back inside your stocks and shares ISA. Most investment platforms will do both steps for you.
The point is that the investment then grows free of tax for good. Gains, dividends and interest inside an ISA aren’t taxed and don’t need reporting. The 30-day rule doesn’t apply, because the ISA counts as a separate tax wrapper. The ISA allowance is £20,000 a tax year, and you can’t carry unused allowance forward.
This has become more worthwhile. The dividend allowance outside an ISA is only £500. Dividend tax rates for basic-rate and higher-rate taxpayers are due to rise by two percentage points from April 2026, to 10.75% and 35.75%. Each year your investments sit outside an ISA, more of the return can be taxed.
There are trade-offs. The sale counts as a disposal, so any gain above £3,000 is taxable. You may want to move just enough each year to use the allowance without going over it. You may also pay dealing charges and the buy-sell spread, and your money could be out of the market for a day or two. If you hold a large amount, these costs can add up.
The 2025 Budget confirmed that from 6 April 2027, savers under 65 will only be able to put £12,000 a year into a cash ISA. The overall £20,000 limit stays, with the rest available for stocks and shares. If you’re 65 or over, the full £20,000 can still go into cash.
For many readers, this is where the biggest savings are. Pension contributions get tax relief at your highest rate of income tax.
On a personal pension or SIPP using relief at source, you pay in £8,000 and your provider claims £2,000 from HMRC, so £10,000 goes into your pot. If you’re a higher-rate taxpayer, you can claim a further £2,000 back through self-assessment. That makes the real cost £6,000. A lot of people never claim that extra relief. You can claim it for earlier years too, so it’s worth checking.
Scotland has its own income tax bands, including a 21% intermediate rate and a 42% higher rate. Providers still add relief at 20%, so Scottish taxpayers above that claim the rest through HMRC.
The best saving is for people earning between £100,000 and £125,140. In that band you lose £1 of personal allowance for every £2 of income, which works out at an effective tax rate of 60%. A pension contribution reduces your adjusted net income. A £10,000 gross contribution taken entirely from that band saves £4,000 in higher-rate tax and gives you back £5,000 of personal allowance, worth another £2,000. You end up with £10,000 in your pension at a real cost of £4,000.
There are limits. The annual allowance is £60,000, and you can’t get relief on more than 100% of your UK earnings in the year. The exception is that anyone can pay in £3,600 gross. You can also use unused allowance from the previous three tax years, provided you were a member of a registered pension scheme in those years.
The allowance tapers down for very high earners. If you have already taken taxable income from a pension flexibly, the money purchase annual allowance cuts your limit to £10,000. Check both before you write a big cheque.
Platforms often stop accepting bed and ISA instructions days before 5 April. Pension providers need time to process payments, and carry-forward calculations need paperwork you may not have to hand. By autumn, you’ll also have a fair idea of what your income for the year will be.
None of this is financial advice. If the amounts are large, or you’re near the tapered allowance, it’s worth talking to an FCA-regulated financial adviser. If you’re 50 or over and have a defined contribution pension, Pension Wise offers a free guidance appointment.
Before the tax year ends on 5 April, use your £3,000 capital gains allowance, sell losing investments in the same year as winners so the losses offset your gains, and move investments into your £20,000 ISA through a bed and ISA. Pension top-ups give relief at your highest income tax rate, and as much as 60% if you earn between £100,000 and £125,140. Do it in the autumn and you avoid the March rush and last-minute cut-offs.
Men are more likely to invest, and often more sure of themselves. But in an ISA or SIPP, too much trading and higher charges can quietly cost you tens of thousands.
Ten years is longer than you think. Tax relief, unused allowances, lower fees and a smarter drawdown plan could add a six-figure sum to your retirement.
Fear of missing out makes you buy high and sell low. Here’s why your brain falls for it, and the simple rules that stop a market frenzy emptying your ISA.
Anthropic, the company behind Claude, has filed to list on Nasdaq. Here’s what it means for your pension, ISA and SIPP, and why a huge loss isn’t the whole story.
Newsletter
The best guides of the week — collected, without the noise, for anyone who likes to stay a step ahead.
