{"id":11867,"date":"2026-03-05T16:18:50","date_gmt":"2026-03-05T16:18:50","guid":{"rendered":"https:\/\/www.wealthtime.com\/advisers\/?post_type=blog&p=11867"},"modified":"2026-03-17T12:45:04","modified_gmt":"2026-03-17T12:45:04","slug":"investment-income-tax-planning-tax-year-end-or-tax-year-start","status":"publish","type":"blog","link":"https:\/\/www.wealthtime.com\/advisers\/blog\/investment-income-tax-planning-tax-year-end-or-tax-year-start\/","title":{"rendered":"Investment income tax planning: Tax year end or tax year start?"},"content":{"rendered":"\n

Tony Wickenden, Technical Connection<\/p>\n\n\n\n

If you\u2019re getting to the end of the tax year and finding that your client\u2019s non-rental investment income (predominantly dividend income and interest) is bearing tax at a rate that is unacceptable to them, what can you do about it?<\/strong><\/p>\n\n\n\n

Well, if your point of realisation is near to the end of the tax year then (aside from pension contributions and investment in EIS and VCT \u2013 see below) there is very little that can be done. However, it should serve to create a resolve to make sure that they aren\u2019t in the same position next year.<\/p>\n\n\n\n

Here\u2019s a checklist of some tax year start considerations that your clients could bear in mind in relation to investment income. Each one, of course, is subject to other important personal and economic considerations:<\/p>\n\n\n\n

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  1. Generate enough dividends to use your \u00a3500 \u201ctax free\u201d allowance. At a 4% yield you\u2019d need a portfolio worth \u00a312,500-\u00a325,000 for a couple.<\/li>\n\n\n\n
  2. Generate enough interest to use your personal savings allowance of \u00a31,000 (basic rate taxpayer) or \u00a3500 (higher rate taxpayer). At 4% interest that\u2019s a \u00a325,000 deposit for a basic rate taxpayer and a \u00a312,500 deposit for a higher rate taxpayer \u2013 additional rate taxpayers don\u2019t qualify.<\/li>\n\n\n\n
  3. There\u2019s also the \u00a35,000 zero starting rate band for savings income but this will only be relevant for those of your clients who have taxable income below the level of the personal allowance so this is unlikely to be relevant for too many of your clients.<\/li>\n\n\n\n
  4. If you are likely to exceed those allowances and have a spouse or civil partner who will not be fully using their allowances, consider a CGT-free transfer of the income producing asset to them. Done early in, or before the start of, the tax year, you\u2019ll get maximum benefit.

    And if your clients have available funds \u2026 they could consider these investments at the tax year end:
    <\/li>\n\n\n\n
  5. Obviously\u2026 maximise contributions to ISA and pensions taking account of any pension relief unused in any of the three previous years that could be carried forward. No \u201cfront end\u201d relief for the former but all income and gains generated inside the ISA wrapper will be tax free\u2026 without limit. Front end relief on your pension contributions can be an excellent way to reduce otherwise taxable income in the year.<\/li>\n\n\n\n
  6. Subject to risk and accessibility\/liquidity aspects consider investment in EIS and\/or VCT to generate stand alone 30% relief on up to \u00a3200,000 invested into a VCT or \u00a31m (and another \u00a31m if investment is in a Knowledge Intensive company). If the VCT route appeals, then keep in mind that the rate of stand-alone relief falls to 20% from 6 April 2026.<\/li>\n<\/ol>\n\n\n\n
    \"\"<\/figure>\n\n\n\n
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    \"Tony<\/figure>\n<\/figure>\n<\/div>\n\n\n\n
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    If you\u2019re getting to the end of the tax year and finding that your client\u2019s non-rental investment income is bearing tax at a rate that is unacceptable to them[…] it should create a resolve to make sure that they aren’t in the same position next year.<\/strong><\/p>Tony Wickenden, Technical Connection<\/cite><\/blockquote><\/figure>\n<\/div>\n<\/div>\n\n\n\n

    Read the next article<\/strong><\/p>\n\n\n\n

    For more tax year end planning top tips, read the next bitesize article. <\/p>\n\n\n\n\n \n Read next <\/a>\n\n\n\n

    <\/div>\n\n\n\n

    Browse all bitesize articles<\/strong><\/p>\n\n\n\n

    For more expert insight and analysis, visit our tax year end library.<\/p>\n\n\n\n\n \n Visit the library <\/a>\n\n\n\n

    <\/div>\n\n\n\n

    Stay connected<\/strong><\/p>\n\n\n\n