6 Mins
With rising taxes and frozen allowances, effective tax planning is more important than ever. Recent Autumn 2024 and 2025 Budgets bring key changes for business owners, investors, families, and internationally mobile individuals, with some opportunities requiring action before the end of the tax or business year, and in many cases before April 2026.
This Tax Planning Guide is designed to help you understand what has changed, how it may affect you, and where early action could make a meaningful difference.
Planning before April 2026
Two areas stand out for urgent review ahead of April 2026:
- Remuneration planning for business owners, following increases in dividend tax rates and employer National Insurance contributions
- Inheritance tax planning, particularly for business and agricultural assets, following changes to Business Property Relief (BPR) and Agricultural Property Relief (APR)
Although the increase in the APR/BPR allowance to £2.5 million (now transferable between spouses and civil partners) is welcome, many estates and businesses will still face a significant inheritance tax exposure. For those considering trusts, planning opportunities are greater where arrangements are put in place before 5 April 2026.
Business owners: remuneration and cash extraction
Extracting value from a company remains a balancing act between salary, dividends, pension contributions and director loans. From April 2026:
- Dividend tax rates increase by 2 percentage points
- Employer NICs remain at 15%, with a reduced secondary threshold
- The dividend allowance remains at £500
- Director loan charges increase in line with the higher dividend rate
Pension contributions continue to be one of the most tax-efficient extraction methods, although forthcoming changes to salary sacrifice mean these arrangements should be reviewed well in advance of April 2029. Where multiple family members are involved in a business, maximising allowances and lower tax bands remains an important planning consideration.
Inheritance tax: a growing concern for many families
Inheritance tax thresholds remain frozen until April 2031, meaning more estates are likely to be caught by IHT over time. Key developments include:
- A £2.5 million lifetime allowance for APR and BPR at 100% relief, with 50% relief above this
- Transferability of this allowance between spouses and civil partners
- Pension funds being brought into the IHT net from April 2027
Alongside these changes, the continued availability of annual gifting exemptions, regular gifts out of income and charitable giving means that proactive, long-term planning remains essential.
Personal tax planning and allowances
For individuals, making the most of income tax allowances and reliefs is increasingly important:
- The personal allowance remains £12,570 but is tapered for incomes above £100,000
- The savings allowance and dividend allowance remain restricted
- The High Income Child Benefit Charge continues to affect families with income above £60,000
Pension contributions and Gift Aid donations remain powerful tools for restoring allowances and mitigating higher effective tax rates.
Pensions, investments and capital gains
The abolition of the lifetime allowance has created greater flexibility for pension saving, but new inheritance tax rules and limits on NIC relief for salary sacrifice mean pension strategies should be reviewed carefully.
For investors, ISAs, EIS, SEIS and VCTs continue to offer valuable tax reliefs, although changes to limits and relief rates mean suitability and timing are more important than ever.
Capital gains tax planning is also critical, with:
- A reduced annual exempt amount
- Higher CGT rates
- Changes to Business Asset Disposal Relief and Employee Ownership Trust relief
- New reporting and compliance requirements, including for crypto assets
International Tax
The replacement of the remittance basis with the new four-year Foreign Income and Gains regime marks a fundamental shift for internationally mobile individuals. Residence status, split-year treatment and long-term inheritance tax exposure now require even greater care.
Trusts remain a key planning tool, but increased reporting obligations and changes to reliefs mean trustees must stay on top of both tax and compliance requirements.
Trusts
Trusts remain a key planning tool, but increased reporting obligations and changes to reliefs mean trustees must stay on top of both tax and compliance requirements.
Making Tax Digital and business compliance
From April 2026, Making Tax Digital for Income Tax Self Assessment will become mandatory for many self-employed individuals and landlords. Quarterly digital reporting represents a major change, and early preparation is strongly recommended.