This newsletter is for general information only and is not intended to be advice to any specific person. You are recommended to seek competent professional advice before taking or refraining from taking any action on the basis of the contents of this publication. The newsletter represents our understanding of law and HM Revenue & Customs practice. © Copyright 7 January 2026. All rights reserved MAKE THE MOST OF YOUR RELIEFS AND ALLOWANCES Chancellor Rachel Reeves’ second Budget on 26 November 2026 was largely a case of upfront costs, such as the scrapping of the two-child benefit cap, being financed by future tax increases. The personal allowance and the higher-rate threshold are frozen for a further three years from April 2028, and the rates of tax on savings income, dividends and income from property will all see increases at some point. A further blow for savers is the reduction of the cash ISA limit from April 2027 for those aged under 65. Salary sacrifice involving pension contributions has also been targeted, although the change will not come in until April 2029. This will make it more difficult for employees to avoid the 60% (63% in Scotland) effective tax rate where the personal allowance is tapered away. The personal allowance remains at £12,570 until 2030/31 and the higher rate threshold will stay at £50,270 – the levels that first took effect in 2021/22. With inflation at 3.6% (November 2025) and more pertinently annual earnings growth at 4.6%, these measures will result in increased taxation for many. Making the most of tax reliefs and allowances while they are still available remains crucial. This guide offers some advice on the principal opportunities you could consider and forms the basis of a good financial plan to complete the tax year. With ideas affecting income and investment, for couples, company directors and employees, and self-employed people, there will be something for everyone. If you would like further advice on any of the topics, or to discuss how they affect your individual circumstances, please get in touch. Introduction SPECIAL REPORT | January 2026 | Year End Tax Planning 2 INCOME TAX SAVING OPPORTUNITIES How to minimise your tax from sharing allowances DIRECTORS AND EMPLOYEES How benefits, bonuses and dividends can be used to increase your tax efficiency GETTING AHEAD ON CAPITAL GAINS TAX PLANNING Timing is everything for your gains and disposals PENSION TAX PLANNING How to make the most of your pension tax privileges Contents Credit: Unitone Vector\shutterstock.com Credit: Unitone Vector\shutterstock.com Credit: AlisaRut\shutterstock.com Credit: AlisaRut\shutterstock.com
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