Tax planning
Strategic advice on pensions, ISAs, CGT and estate planning
As part of our investment and financial planning services, we help clients make informed, tax-efficient decisions. We believe effective financial planning should consider the impact of income tax, capital gains tax (CGT) and inheritance tax (IHT), and we work with clients to identify strategies that support their wider financial objectives.
Our advice may also include pension optimisation, ISAs, trusts, gifting and estate planning, with recommendations reviewed regularly to reflect changes in legislation and government Budget announcements.
Personal tax can be complicated. Rules and allowances change and it’s all too easy to overpay, so we can guide you with a financialplan that will help make a difference to your long-term finances.
| Allowance | Current level (2026/27) | Status | Notes / changes |
|---|---|---|---|
| Personal Allowance | £12,570 | Frozen | Frozen since 2021/22 and expected until 5th April 2031 |
| Marriage Allowance | £1,260 | Frozen | No change year-on-year |
| Capital Gains Tax (CGT) allowance | £3,000 | Unchanged | Halved from £12,300 to £6,000 in 2023, and then to £3,000 in 2024; now stable |
| Stocks and Shares ISA allowance | £20,000 | Unchanged | No change for 2026/27 |
| Cash ISA allowance | £20,000 | Due to change | Reducing to £12k from 6th April 2027 |
| Pension annual allowance | £60,000 | Unchanged | Subject to tapering for high earners |
| Inheritance Tax (nil-rate band) | £325,000 transferable | Frozen | Frozen since 2009 and until at least 2030/31 |
| Residence nil-rate band | £175,000 transferable | Frozen | Also frozen alongside IHT threshold |
Common tax planning scenarios
We all need to pay tax but with careful planning, you shouldn’t pay more than you need to. Below, we explore a range of tax planning scenarios and steps that can be taken to help manage and mitigate tax liabilities.
Inheritance Tax (IHT) mitigation
Once you have established that you have enough to support your own lifestyle through to later life, careful planning can help reduce the inheritance tax liability on your estate
Making gifts during your lifetime
Gifting assets early can be an effective way to reduce the value of your estate. Most lifetime gifts are considered potentially exempt transfers, meaning they fall outside your estate for inheritance tax purposes if you survive for seven years after making the gift.
Should you die within seven years then your available nil rate band would be used to offset the gift first. If the gift exceeds your available nil rate band then additional tax is charged. After three years’ survival the additional tax reduces by 20% each year and any growth on the gifted asset is outside your estate from day one.
Using surplus income
Regular gifts made from surplus income can also be an effective planning tool. Providing these gifts form part of your normal expenditure and do not affect your standard of living or require you to draw on capital, they can be immediately exempt from inheritance tax.
Business and agricultural reliefs
Business and agricultural assets may qualify for valuable inheritance tax reliefs. Those with business interests or farming assets should review how these holdings are structured to ensure they meet the relevant qualifying conditions and that the available relief is optimised.
Estate planning and wills
A well-structured will is an important part of inheritance tax planning and can help ensure your wishes are carried out efficiently. It can also provide opportunities to reduce the tax burden on your estate. For example, estates that leave at least 10% of their net value to charity may benefit from a reduced inheritance tax rate of 36%.
Making the most of you Capital Gains Tax (CGT) allowance
Keeping accurate records of investment transactions is important, particularly when assets have been sold at a loss. Capital losses can usually be carried forward and used to offset future gains, helping to reduce potential Capital Gains Tax liabilities.
For investments held outside ISAs and pensions, there may be opportunities to make use of your annual Capital Gains Tax allowance. By carefully reviewing and managing holdings, gains can be realised in a tax-efficient way. While the same investment cannot usually be repurchased within 30 days, it may be possible to reinvest through alternative investments or within an ISA.
Pension and income tax planning
Pensions remain one of the most effective ways to support long-term financial planning while also offering valuable tax benefits. Pension contributions can reduce your taxable income and, in some circumstances, help preserve valuable allowances that may otherwise be lost as income increases.
Those whose income is between £100,000 and £125,140, lose some or all of their personal allowance and so the right pension contributions can bring their income below the £100,000 threshold and allow them to recover their £12,570 personal allowance.
Many people do not make full use of their available pension contribution allowances. Subject to eligibility, unused allowances can often be carried forward for up to three tax years, creating opportunities to make additional contributions and potentially reduce higher-rate tax liabilities.
Pension planning can be complex, particularly when balancing tax considerations with your wider financial objectives. Our advisers can help you understand the options available and identify the most appropriate approach for your circumstances.
Tax-efficient savings
Smart use of reliefs is made even more important by recent tax increases for dividend and savings income. By utilising ISAs, investment bonds and pensions, you can grow your savings while keeping more of what you earn.
Spreading your investments across different tax-efficient structures can also help you build a more reliable income when it comes to retirement.
What you need to know
Tax laws may change and taxation will vary depending on your own personal circumstances.
Investments can go up and down in value and you may not get back the full amount you invest.