Tax Years End Quickly

It’s the end of the tax year in a few weeks. Do these come around more quickly?

Well, in a way, they do.

Our perception is that time speeds up the older we get. The brain encodes new experiences deeply. If we do fewer new things, there’s less memory of them. Less memory leads to compression of time. If this sounds like you, the answer is to do more new and different things.

As 5 April 2026 approaches, perhaps one new thing could be to look at the tax year more strategically?

Put another way: can you remember all the Government’s tax changes recently?

Take capital gains tax – CGT for short. The basic rate was once 10%, and higher 20%. They’re now 18% and 24%. That’s for assets that aren’t residential property … which has different rates. CGT on business assets disposal relief was 10%, is 14% as I type, and is going up to 18% from 6 April. At the same time, carried interest gains will start being taxed as profits, subject to income tax.

Enough detail for you? That’s just a portion of recent and upcoming changes to CGT alone. Other taxes have other changes. No wonder it’s hard to keep up.

So, instead of rushing to the end of the tax year, it makes sense to spread this complexity out, work with an expert and make sure you’ve covered every possible item.

A big part of your tax strategy will be to fill every possible tax-efficient bucket, in the optimal order, throughout the year. First on this list might be your pension (with its £60,000 annual contribution cap for tax relief, subject to tapering) and then it’s likely to be your ISA (£20,000, again with conditions). Think about using a spouse’s allowance, if need be.

But once you’ve filled these, where else do you go? Enterprise investment schemes and venture capital trusts can be handy ways of shielding money from tax. But they do require you to invest in small and risky companies. After all, they’re designed to get people like you funding the next generation of great British companies. Some will soar; others will sputter and fizzle out. Some might even implode.

After that? There are a lot of headlines suggesting taxes on the wealthy are forcing people overseas. But that’s not necessarily the case. You could just move your money. And one option that many appear to be taking is to invest in offshore bonds.

These are domiciled in lower tax jurisdictions, like the Isle of Man. It’s a big market with plenty of products and options. In many cases, returns can be free of tax. When you do attract tax, you can sometimes spread it over several years, to get your overall liability down.

After all, you’re in this for the long term.

And new data show that the long term can very much pay off. The Financial Times reports that there are now more ISA millionaires than there are National Lottery millionaires. Getting rich slowly has always been a more sensible approach – but it’s always good to get a reminder that the financial tortoise will beat the financial hare.

If you’d like to check you’ve covered everything, we can help. Our experts are available on 020 7467 2700 and at hello@firstwealth.co.uk.

This document is marketing material for a retail audience and does not constitute advice or recommendations. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested.