Smart financial planning tips for tax year end

Financial Planning Tips for Tax-Year End 2025

As we head closer to the end of the tax year on 5 April, it’s worth setting some time aside to ensure you’re making full use of the tax reliefs and allowances available to you. Whether you’re looking to build a strong financial foundation for your family, secure a comfortable retirement, or plan how to pass on your wealth efficiently, small steps taken now can make a big difference in the long term.

This article will walk you through some tax-smart financial planning tips to help you maximise tax efficiency, protect your wealth, and plan for the future with confidence.

Smart financial planning starts with a goals-based approach

Goals-based financial planning is designed to help you achieve what matters most to you and your family. It starts with understanding your current financial situation and takes a holistic view of your assets and what you want to achieve in the future. Using this information, we then create a tailored plan that aligns with your goals, ensuring you have a clear path to help you live the life you want and give you financial peace of mind.

However, a financial plan is only effective if it evolves with you. Life is full of unexpected changes, and regular reviews help keep you on track. By monitoring your pension, ISAs, and investments, you can stay focused on the long term while avoiding reactive decisions based on short-term market fluctuations. We recommend an annual review with your financial adviser to ensure your plan remains relevant, adapts to any life changes, and maximises available tax allowances.

Maximise pension contributions

Planning for your retirement is about making sure you have plenty of options so you can enjoy the things you want to when you’re no longer working – and not be restricted by your income. The more you can save into a pension now – the more choices and peace of mind you’ll have later in life.

Whatever age you are, maximising your pension contributions is one of the best ways you can save for retirement because of the Income Tax Relief you get on the money you pay into it.

This tax year, until 5 April, you can contribute up to £60,000 or 100% of your earnings into your pension, whichever is lower, and receive tax relief.

If you haven’t used all of your allowance in the previous three tax years, you can carry it forward. Any amount paid in excess of your available annual allowance, including any carried forward, will be subject to Income tax.

You can also make one-off contributions to a pension at any time in the tax year – as long as they fall within your annual allowance.

Use – or lose – your ISA Allowance

Investing in an ISA should always be part of your financial plan because the £20,000 annual ISA allowance remains one of the smartest ways to save income and capital gains tax-free.

ISAs offer a flexible way if you want to start investing in stocks and shares. However, any unused ISA allowance doesn’t roll over to the next tax year, so it’s worth making the most of this year’s £20,000 limit before 5 April.

ISAs benefit from the power of compounding, which means that even if you add small amounts to your ISA each year, your investment can grow quite significantly in the long run because the returns will be reinvested.

Invest in your child’s future

Children can have their own ISA too, and it’s a great way to give them a financial head start in life.

You can invest up to £9,000 every year, per child into a Junior ISA. This can either be a Stocks & Shares ISA, a Cash ISA or a mix of both.

If you invested £100 a month in a Junior ISA from birth, assuming a net average annual 5% growth rate, the account would have just over £35,000 in it by the time the child turned 18. With the maximum £9,000 a year contribution, the pot would be worth more than £263,000.

This is an example for illustrative purposes only. The growth rate could be more or less than this amount and you may get back less than invested.

Make the most of your tax-free gifting allowances

If your estate is worth over £325,000, your family will be liable to Inheritance Tax at 40% upon your death.

There are currently two notable exceptions to this: pensions and the IHT gifting allowance.

However, from April 2027, most pensions will be included in the value of your estate and therefore may be subject to IHT.

Gifting is a tax smart way to reduce any Inheritance Tax your family will have to pay. You can give cash gifts of up to £3,000 per year (or £6,000 between couples) to your loved ones that won’t be counted as part of your estate for tax purposes.

Make or review a Will

Making a Will is an important step in protecting your family’s financial future. It gives you peace of mind knowing that your loved ones won’t have to face additional stress, legal complications and paying any more inheritance tax than they need to.  It also means that your estate is distributed according to your wishes.

If you have a Will in place, make sure that it still reflects your current situation and your wishes for the future.

Disposing of assets tax-efficiently

Capital Gains Tax (CGT) increased from 10% to 18% for basic rate tax payers and 20% to 25% (for higher rate tax payers) on 30 October 2024 following the Autumn Budget. The residential property surcharge was not increased, effectively bringing the standard CGT rates in line with the rates charged on residential property investments.

If you are planning to sell any assets that may be subject to CGT, it’s worth considering whether you can spread the sale over several tax years or gifting some of the asset to your spouse or civil partner.

If you are selling a property that was once your home, there is a valuable relief known as ‘lettings relief’, however for sales after April 2020 letting relief only applies where the homeowner and their tenant are in occupation of the property at the same time.

Ready to make the most of tax-year end?

Smart tax planning and financial planning go hand in hand. When you make financial decisions without considering their tax implications, you risk undermining your long-term financial planning goals.

By setting time aside before 5 April with your financial adviser, the further your money is likely to take you so you can achieve your financial goals in the future.

The value of an investment with St. James's Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than the amount invested.

An investment in Stocks and Shares ISA will not provide the same security of capital associated with a Cash ISA or a deposit with a bank or building society.

The levels and bases of taxation, and reliefs from taxation, can change at any time and are generally dependent on individual circumstances.

Please note that Cash ISAs are not available through St. James's Place.

Will writing involves referral to a service that is separate and distinct to those offered by St. James's Place.

Although the content of the article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.