Each year we update this document to reflect a number of tax planning tips based on the existing tax legislation and to reflect any changes to tax strategy announced in the previous budget. Tips will cover strategies around personal and family tax planning, investment, property, retirement planning, estate planning and guidance around sensible business and employment strategies too.
Taxation continues to present challenges for taxpayers and business owners. Personal tax allowances and income tax bands will now remain frozen until 5 April 2031, as will employee and self-employed national insurance contribution (NIC) thresholds, in effect raising taxes by the operation of inflation. Taxpayers in Scotland are also faced with frozen thresholds for the higher rates of Scottish income tax. Tax rates on dividends have risen by two percentage points for basic and higher rate taxpayers, and the basic, higher and additional rates on savings and property income will rise by the same amount from 6 April 2027.
Also to come, the maximum subscription to cash individual savings accounts (ISAs) will be reduced to £12,000 from 2027/28 for investors under age 65, although the overall ISA limit will stay at £20,000. And salary sacrifice to fund pension contributions will be capped at £2,000 a year from 2029/30.
The freeze on inheritance tax (IHT) nil rate bands will continue for a further year until April 2031. However the cap on the 100% IHT relief for shares in unlisted trading companies and for farms has been increased to £2.5 million rather than the £1 million initially announced, and unused relief is now transferable between spouses. From April 2027, unused pension funds will be included in the value of the deceased’s estate (unless the funds are inherited by a spouse or civil partner).
This guide highlights 50 ways in which you can currently use certain tax reliefs to your advantage, and how to avoid some of the tax penalties. It can help you navigate the complexity of certain tax rules and create more tax-efficient plans.
