12. 03

 Why Tax Planning is Essential in March 2026

Why Tax Planning is Essential in March 2026
As the tax year draws to a close on April 5th, this is an opportune moment to review your financial plans. Many tax allowances renew at this stage and proactive preparation can help you make the most of these while ensuring you do not incur unnecessary tax liabilities.

At Fiander ETL, our expert team of Southampton-based advisers are here to help. With years of experience behind us, we’re on hand to ensure you get clear, practical advice.
Review Your Earnings and Tax Bands
  • Check where your income falls this tax year. If near higher-rate thresholds or £100,000, plan ways to maintain allowances, possibly through pension contributions or charitable giving.
  • For married couples and civil partners, review how income and investments are split between the two of you. Equalising income between partners can sometimes help reduce the overall household tax liability, particularly where one partner falls into a higher band.
  • If claiming Child Benefit, monitor household income levels to avoid tax charges.
  • Making Gift Aid donations and /or pension contributions by 5 April can help extend your basic rate band and maximise allowances.
Pension Contributions
  • Pension contributions are a highly effective way to lower taxable income while securing your financial future.
  • Review your total contributions this year, including any employer payments.
  • There may still be scope to increase your contributions and benefit from valuable tax relief. 
  • Unused pension allowances from the previous three tax years could be available, offering significant planning opportunities. 
  • Higher earners should check if tapered allowances apply, to avoid unexpected tax charges. 
Dividend Planning
  • Dividends can play a role in tax planning for those who receive income from company profits.
  • Unlike salary, dividends are not subject to National Insurance and are taxed under separate dividend tax rates. However, the most tax-efficient balance between salary, dividends and pension contributions will depend on individual financial circumstances.
  • Timing is important this year, as dividend tax rates are set to increase by 2% for the basic and higher bands from April 2026.
  • Reviewing your options before the tax year ends could therefore help minimise your liabilities. 
Utilising ISAs
  • Your ISA allowance resets each tax year, so make sure you utilise it.
  • Each individual can invest up to £20,000 per tax year into ISAs, allowing savings to grow free from income tax and capital gains tax. If unused by 5th April, this allowance is lost.
  • Families should also look at Junior ISAs and pension contributions for children. Starting early enables investments to benefit from long-term compounding, while making the most of annual allowances. 
Capital Gains Tax (CGT) Planning
  • CGT planning is essential if you are considering selling assets or investments before the end of the tax year.
  • Each individual enjoys an annual CGT exemption of £3,000, so profits up to this threshold are usually tax-free.
  • Crystallising capital losses within the same tax year can help offset gains and reduce your overall CGT bill.
  • Consider government-backed investment schemes, like the Enterprise Investment Scheme (EIS), which may offer opportunities to defer capital gains.
  • Business Asset Disposal Relief (BADR) still provides valuable relief for those selling qualifying business assets. However, with the recent rate increase to 18%, time is of the essence for significant planning ahead of the changes. Even so, BADR remains a key tool for long-term exit strategies.
Inheritance Tax (IHT) Considerations
  • The tax year-end is also a good time to review IHT planning opportunities.
  • Individuals can make use of their annual gifting exemption each year, which allows gifts of up to £3,000 without the value being added to their estate for IHT purposes.
  • Consider whether you are in a position to make regular gifting from surplus income.
  • Lifetime planning decisions can mitigate potential future IHT liabilities when these strategies are applied progressively across an extended period. 

Please get in touch with the team at Fiander ETL if you would like to discuss your own tax position and potential pre year planning.

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