Important last-minute checklist for tax year end 2025

There’s not long to go now until the end of the 2024-25 tax year – but, if you’re on it, there’s still time to take advantage of your annual allowances.

Like jet-washing the patio or clearing out the gutters, tax admin is invariably a bit of a chore, but over the years getting these annual jobs ticked off could save you a lot of money in the long run.

• Learn with ii: ISA Allowance | ISA Investment Ideas | Transfer a Stocks & Shares ISA

Get cracking with our last-minute checklist – you’ve got until midnight on 5 April, but in some cases, you may need to act sooner.

1) Use your ISA allowance

Each year you can pay up to £20,000 into individual savings accounts (ISA) - sheltering your money from income, dividend and capital gains tax (CGT). You can pay it all into one ISA or spread it across cash, stocks and shares, even innovative finance ISAs.

For younger adults saving for property or later life, you can consider the Lifetime ISA (LISA). You can pay up to £4,000 a year and contributions are boosted by a government top up worth 25% (a maximum of £1,000 a year). You must be aged between 18 and 40 to open a LISA and can make contributions until age 50.

You can now open and pay into as many ISAs of each type as you like, each tax year (with the exception of the LISA). However, it’s a ‘use it or lose it’ allowance – so fill it up by the end of the tax year if you can.

2) Don’t forget the kids

It’s also possible to pay £9,000 a year into a Junior ISA (JISA) on behalf a child, whether that’s your own kids, a grandchild or even a niece or nephew. This can be particularly helpful if you’ve maxed out your own tax-free savings allowance. The catch though is that the child will be able to access their nest egg as soon as they turn 18.

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3) Think about a Bed & ISA

If you’ve got investments such as shares sitting in general investment or trading accounts, your dividends and capital gains could be subject to tax if you exceed your annual allowances (£500 a year for dividends and £3,000 for capital gains).

By using the so-called Bed & ISA process, it’s possible to sell your investments and immediately buy them back within a stocks and shares ISA (so long as you have a stocks and shares ISA and a trading account on the same platform).

You just need to check you have enough remaining ISA allowance for the current tax year and ensure you don’t move so much that you trigger a capital gain. Platforms can get busy in the run up to the end of the tax year, however, so if you want to do a Bed & ISA, you’ll need to act fast. interactive investor’s deadline for applications is 4.30pm on 28 March.

4) Use your CGT allowance every year

Significant cuts to the tax-free CGT allowance (from £12,300 in 2022-23 to £3,000 today) mean increasing numbers of even modest investors will find themselves facing a tax bill when they sell their investments.

However, by using your CGT allowance every year (rather than just in the year you want to sell) it’s possible to keep the tax at bay. Realising gains to use your tax allowance doesn’t necessarily mean you need to take your money out of the market. While the 30-day rule prevents you from rebuying the same investments straight away, you can invest in something similar. Alternatively, you can use the opportunity to rebalance or add more diversity to your portfolio.

5) Give money to your other half

Another way to fend off CGT is to give money to your spouse or civil partner. This way, each of you can use your annual allowance. If you can’t completely mitigate your CGT bill, you may still be able to save tax by giving money to a spouse if they will pay the lower rate of CGT (18%) and you the higher (24%).

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6) Use your pensions allowance 

Most people can pay in 100% of their earnings, up to a maximum of £60,000, into their pension and get tax relief on their contributions (there are exceptions for the highest earners as well as those who have already made a taxable withdrawal from their pension).

But paying lots of money into your pension doesn’t just shore up your retirement finances, it can also cut your tax bill in the here and now.

For example, if you earn over £100,000 your £12,570 personal allowance will gradually be tapered away (at a rate of £1 for every £2 you earn over £100,000) creating an effective tax rate of 60% on earnings up to £125,140 (at which point you lose the personal allowance altogether).

However, as pension contributions reduce your taxable income, it’s possible to swerve this 60% tax trap by paying more into your pension (and bringing your taxable income back below £100,000). This pension hack can also help you if you’ve had a pay rise that’s pushed you into a higher-rate tax bracket or to avoid the high-income child benefit tax charge, which reduces the value of the benefit if one parent earns more than £60,000.

Take advantage of carry forward rules

If you’re fortunate enough to be able to pay in more than your annual allowance for pensions, it’s possible to carry forward any unused allowance you have from the previous three tax years.

Note though that you can’t use carry forward rules if you are over 55 and have already made a taxable withdrawal from your pension, which means you’ll be subject to the lower, £10,000 money purchase annual allowance (MPAA). Carry forward rules can be particularly helpful for higher earners who have a fluctuating income.

7) Claim the marriage allowance

If you are married (or in a civil partnership) where one of you has an income below the personal allowance (£12,570), it is possible for them to transfer £1,260 of their allowance over to their partner, if they pay basic-rate tax (with an income over £12,570 but below £50,270).

This can save married couples £252 a year. You can also backdate your claim to 5 April 2020 if you would also have been eligible in previous tax years.

8) Use your gift allowance for IHT

Finally, if it’s looking like your loved ones will need to pay inheritance tax (IHT) when you die, it pays to be aware of the annual gifting allowance.

• Ask ii: how can I gift money to my children tax efficiently?
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Each year you can give away up to £3,000 and that money will move out of your estate immediately for IHT purposes. That money can be given to one person or spread between a few. This is another allowance that you can carry forward – but only for one year. That means if you didn’t use your allowance last year, you can give away £6,000 this tax year (while a couple could give away £12,000 between them).

It’s not quite so time sensitive, but if you have any loved ones getting married this year you can also give them a tax-free wedding gift. You can gift up to £5,000 if your child is getting married (or starting a civil partnership), £2,500 to a grandchild or £1,000 to anyone else. This tax-free wedding gift can also be combined with your annual gift allowance.