Your tax checklist for the year ahead

At a glance

• The economic outlook is brighter, but it’s still vital to ensure you’re using all the allowances and exemptions you’re entitled to.
• Recently announced changes to Inheritance Tax, Capital Gains Tax rates and National Insurance for employers may affect your tax liability – and planning.
• A financial adviser can help you take action to tax-proof your finances over the coming months.

2024 saw the new Labour government announce a raft of changes to many key taxes, including rises in Capital Gains Tax and Employer NI contributions – and sweeping changes to Inheritance Tax regulations.

The impact of these changes has already made itself felt for business owners, those selling or planning to sell assets and crucially, those thinking about leaving money to their family.

Not only that, but with income tax bands frozen until 2028, even more people found they’d unwittingly crossed the threshold into a higher tax band – and ended up with a bigger tax bill than they’d bargained for.

With the Office for Budget Responsibility forecasting that the amount of tax paid by the public could hit a historic high of 38% of GDP by 2029-30,¹ simply being aware of these changes isn’t enough.

Knowing what you can do about them is key.

This checklist shows the main tax changes in the 2025/26 tax year, how they could affect your finances, and what you might do to soften the blow.

What’s changed about Income Tax and National Insurance?

Income Tax rates remain unchanged in 2025/26. Ditto your personal National Insurance contributions (although it was a different story for employers). Your personal allowance – the amount of income you don’t have to pay tax on – is still £12,570. The basic rate is still 20%, and the higher-rate threshold, at which you start paying 40%, is £50,270. The additional-rate tax threshold, at which you pay 45%, remains at £125,140. These are currently frozen until 2028.

What’s changed about the Savings Allowance?

More good news – the Personal Savings Allowance also remains unchanged for 2025/26. Basic-rate taxpayers can still earn £1,000 interest on savings before tax. For higher-rate taxpayers, the allowance is £500, and for additional-rate taxpayers, it’s zero.

The annual amount you can save in your ISAs before paying tax is £20,000, so topping up before tax year-end is always a key to-do if you’re able to put more away in a good year. If you’re saving into a mix of cash savings accounts and ISAs, now’s a good time to review which ones are performing best for you. So you can make changes in plenty of time for next tax year-end.

What’s changed around personal pensions?

In one of the biggest announcements of the Autumn Budget, the Chancellor declared that unspent pension pots would no longer sit outside your estate – and would therefore potentially be liable for 40% Inheritance Tax (IHT).

Farmers and landowners also found themselves in the firing line. The agricultural property relief will be severely restricted from 2026, with any agricultural land and qualifying assets worth over £1m potentially liable for IHT for the first time.

These changes may leave thousands more savers paying Inheritance Tax when they didn’t expect to, and leaving less to their loved ones as a result. So, if you think your own legacy planning might be implicated, the first step is not to rush into anything, and to discuss the other avenues open to you with your financial adviser.

Pensions continue to be very tax-efficient, long-term savings options – paying into a pension is still a great way to save for your retirement. Eligible pension contributions automatically get a cash boost from the government in the form of tax relief. The standard annual allowance for pension contributions - that is, the maximum total pension contribution you, your employer or a third party, can make and receive the full benefits of tax relief in a year – remains at £60,000. Tax relief on personal contributions is limited to up to 100% of your relevant earnings in the tax year, or £3,600 if you earn less than £60,000.

What’s changed about ISAs?

There were no changes announced to ISA allowances in 2025/26. Your tax-efficient ISA allowance is still £20,000 for 2024/25, both Stocks & Shares ISAs and Cash ISAs.

The Junior ISA annual allowance also remains unchanged at £9,000. Alongside children’s pensions, Junior ISAs are a great way to give your children or grandchildren a financial head start. Only a parent or legal guardian can set up a children's pension or Junior ISA, but anyone can contribute to them.

What’s changed about Capital Gains Tax?

Although the £3,000 CGT annual allowance – the gain you can make before you start paying tax – hasn’t changed, the rates that you’ll pay have.

The lower rate of CGT rose from 10% to 18% for basic rate taxpayers from 30 October 2024 – an 80% increase. And for higher and additional taxpayers, CGT has increased from 20% to 24%. The rates on selling additional property didn’t change.

So if you were planning to sell an asset in the short term or living off the proceeds of a sale as part of your retirement income plan, it may be time for a rethink. When it comes to CGT, we always recommend taking financial advice before making the final decision to sell. CGT is not the most straightforward of taxes, and you don’t want to inadvertently find yourself paying more than you have to.

Tax-proof your year

2024 was a challenging year on many levels, and many of us felt the impact of the Autumn budget on our long- and short-term finances. If you have questions, or are reconsidering some of your financial planning, do get in touch with us.

We can help make sure that your finances are in a good place going into the new tax year.

The value of an investment with St. James's Place will be directly linked directly 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 a Stocks & 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.

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