10 year-end tax planning tips for individuals

Proactive year-end tax planning is a powerful tool for anyone looking to maximise deductions, apply tax relief and be more tax-efficient. Taking steps now can make a big different to your tax position. Here we offer some practical tips to help you make the most of tax saving opportunities.

We recommend speaking to an accountant to discuss your personal circumstances and maximise your tax savings. Speak to our experienced team at TaxAssist Accountants Luton North West for advice and guidance.

1. Use your dividend allowance

Use your dividend allowance, this is tax-free income. The dividend allowance for 2024/25 is £500. By using your dividend allowance, you are increasing your tax-free income. 

In the UK, individuals pay tax on dividends above the dividend allowance. The tax rates are: 

The dividend tax rate is lower than income tax rates. This is one of the reasons dividends are tax-efficient income. 

2. Utilise your Capital Gains Tax (CGT) annual exemption

Use your CGT tax-free allowance against your taxable gains. The CGT annual exemption is £3,000 and you are not able to carry forward any unused exemption. The CGT rates have been increased following the Budget.

If you are thinking of selling an asset, there are various CGT reliefs and exemptions. CGT can get complicated, so we always recommend speaking to an accountant.

3. Benefit from personal savings allowance 

Use your personal savings allowance to maximise your tax-free savings income. The personal savings allowance is £1,000 if you are a basic rate taxpayer or £500 as a higher rate taxpayer. Additional rate payers do not get a personal savings allowance.  

If your income is below £17,570, you may be eligible for the starting rate of savings where you may be able to earn up to £5,000 of interest tax-free. 

4. Utilise your ISA allowance

Maximise your ISA (Individual Savings Account) and use your annual ISA allowance. Individuals do not pay tax on interest received on an ISA. The ISA allowance is £20,000 across all types of ISA. This includes Cash ISAs, Stocks and Shares ISAs, Innovative Finance ISAs and Lifetime ISAs.

A lifetime ISA is type of ISA for 18–39-year-olds looking to purchase their first home or save for later life. The limit for the Lifetime ISA is £4,000 per annum, which counts towards your annual ISA limit of £20,000.

A junior ISA is a long term savings account for children. The annual limit for a junior ISA is £9,000. Parents can open a junior ISA for a child who then can't access the money until they're 18.

5. Make pension contributions 

Most UK taxpayers get tax relief on personal pension contributions, based on the rate of tax they pay. A basic rate taxpayer (and starter rate in Scotland) will get 20% relief on pension contributions. A taxpayer who pays £80 into their pension will get £20 paid in by the Government. Higher and additional rate taxpayers, and top rate taxpayers in Scotland, may get higher relief. 

You may need to watch out for the annual allowance. This is the amount you can save in a pension, or the amount your pension can grow each year before a tax charge arises. The amount of the annual allowance depends on your circumstances.

6. Gift aid charitable donations

Making charitable donations through gift aid gives higher and additional rate taxpayers tax relief at the basic rate. The charities can also claim an extra 25% on your donation, at no cost to you. So, if you're making a donation to charity make sure you tick the gift aid box and keep the records for your tax return.

Another tax planning opportunity is to elect to include a gift aid payment on your prior year tax return. For example, you can include a donation made on 1st July 2025 on your 2024/25 tax return to get tax relief sooner.

7. Apply for marriage allowance 

Marriage allowance lets an individual transfer some of their personal allowance to their husband, wife or civil partner which can result in income tax savings. This could reduce tax by up to £252 in the tax year.

If one person does not use all their personal allowance, the other person can use some of it to reduce their tax. To apply for marriage allowance, both individuals must be basic rate taxpayers. 

8. Consider the high income child benefit charge 

An individual receiving child benefit with income over £60,000 may be subject to the high income child benefit charge. This means they will need to pay some or all the child benefit back to HMRC. Where it is possible to move income between spouses, it may be worthwhile and remove the tax charge. Alternatively, it may be appropriate to opt out of getting child benefit payments to avoid the tax burden.

9. Make tax efficient investments

Individuals can invest in Venture Capital Trusts (VCTs), Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) and receive tax relief. Investing in these schemes make offer tax advantages over other investments.

For eligible investments, investors may be able to claim 30% income tax relief and there's no Capital Gains Tax on disposals. Speak to your accountant for more information.

10. Plan for Inheritance Tax (IHT) 

When it comes to Inheritance Tax planning, there's a lot to consider and you must seek specialist professional advice.

The current IHT thresholds are frozen until 2030, and from April 2027 there are changes to pension rules under IHT. This means that more estates could exceed the IHT threshold and have tax to pay. Taking action now could help you save tax.

How can TaxAssist Accountants help? 

Tax planning is an important tool. Our proactive and experienced team at TaxAssist Accountants Luton North West can help you to plan for tax effectively. To discuss your options further, speak to our expert team today on 01582 945 622 or use our online contact form.

Last updated: 11th February 2025