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This commentary is for information only and does not constitute financial advice or a recommendation. Individual outcomes depend on personal circumstances and professional advice is essential.<\/em><\/p>\n\n\n\n Tax year end is often the busiest point in the financial calendar, with advisers focused on deadlines, last\u2011minute allowances and client admin. But tax year start<\/strong> can be just as valuable when it comes to client outcomes. With fresh allowances available and more time to plan, it presents an opportunity for advisers to be proactive rather than reactive.<\/strong><\/p>\n\n\n\n In this blog, Wealthtime\u2019s<\/a> CX Director, Kylie Clark, shares practical hints and tips on how advisers can make the most of tax year start, from using new tax allowances effectively to reviewing inheritance tax and pension planning strategies that can help deliver better outcomes for clients over the year ahead.<\/p>\n\n\n\n Navigating Lower Tax Allowances in Savings and Investment Planning<\/strong><\/strong><\/strong><\/strong><\/p>\n\n\n\n Lower allowances are having a tangible impact on investor behaviour. Wealthtime research with Ad Lucem<\/a> shows that more than half of advice\u2011engaged investors with \u00a350,000 or more in investable assets are now more concerned about tax than they were a year ago<\/a>.<\/p>\n\n\n\n With the dividend allowance reduced to \u00a3500 and the capital gains tax annual exemption now just \u00a33,000, these reliefs still matter. For advisers, year\u2011end \u201callowance tidying\u201d is increasingly giving way to earlier, more deliberate planning around wrappers and income timing.<\/p>\n\n\n\n Making the most of familiar allowances<\/strong><\/strong><\/strong><\/p>\n\n\n\n For couples, foundational planning remains important. Ensuring assets and income are structured so both partners can use their personal savings allowance, dividend allowance and ISA allowances can still reduce overall tax exposure. However, lower thresholds mean these decisions need to happen earlier in the tax year, not in its final weeks.<\/p>\n\n\n\n Although many clients intend to take action (such as topping up ISAs, adjusting regular investments or reviewing pensions) research suggests that more than half still make these changes in March or April. Earlier engagement allows advisers to be proactive rather than reactive.<\/p>\n\n\n\n Outside tax\u2011protected wrappers, dividend income is taxed at marginal rates of up to 39.35%, reinforcing the value of pensions, ISAs and in some cases, investment bonds. Regular funding strategies are often more effective than sporadic contributions, particularly where clients want to build tax efficiency gradually.<\/p>\n\n\n\n For clients with higher risk tolerance and sufficient capacity for loss, advisers may also discuss tax\u2011advantaged investments such as EISs or VCTs as part of a broader, diversified approach. These can offer meaningful tax benefits, but their higher risk and limited liquidity mean they are rarely suitable as core holdings.<\/p>\n\n\n\n Investment bonds are also seeing renewed interest, particularly where flexibility over the timing of taxable gains is valuable. Their technical features, such as top\u2011slicing relief or the 5% withdrawal facility, mean outcomes depend heavily on individual circumstances and professional guidance.<\/p>\n\n\n\n The removal of the lifetime allowance marked a significant shift in pension policy, but it has also introduced a new set of considerations. In place of a single headline cap, advisers are now navigating annual allowances, tax\u2011free cash limits, death benefit rules and potential inheritance tax changes – all of which interact in complex ways.<\/p>\n\n\n\n Client confidence has not necessarily improved either. Almost half of advice engaged investors say uncertainty around rules and allowances is one of their biggest concerns, underlining the importance of clear explanations at key decision points.<\/p>\n\n\n\n The standard annual allowance of \u00a360,000 remains central to pension funding, but tapering rules and the Money Purchase Annual Allowance can significantly restrict contributions for some clients. Carry forward continues to provide valuable flexibility, particularly for those with fluctuating income or late\u2011career capacity to contribute more.<\/p>\n\n\n\n Beyond retirement saving, pension contributions can play a wider tax planning role. In some cases, they may help reduce adjusted net income, restore the personal allowance or mitigate the High Income Child Benefit Charge, depending on circumstances.<\/p>\n\n\n\n Since April 2024, pension planning has increasingly focused on tax\u2011free cash limits, including the Lump Sum Allowance and the Lump Sum and Death Benefit Allowance. These thresholds can influence both the timing of withdrawals and how benefits are taken.<\/p>\n\n\n\n More fundamentally, proposed changes to the inheritance tax treatment of unused pension funds from April 2027 are prompting advisers and clients to revisit long\u2011standing assumptions. If pension assets become subject to inheritance tax alongside existing income tax rules after age 75, the traditional view of pensions as the default estate\u2011planning vehicle may no longer hold.<\/p>\n\n\n\n As a result, some clients are considering using pension wealth more actively in retirement, balancing income needs, gifting strategies and alternative solutions such as life assurance within a broader planning framework.<\/p>\n\n\n\n Inheritance tax is affecting more families each year as thresholds remain frozen and asset values continue to rise. The nil\u2011rate band has stayed at \u00a3325,000, with the residence nil\u2011rate band at \u00a3175,000, and both are set to remain unchanged until at least April 2030.<\/p>\n\n\n\n At the same time, government forecasts suggest inheritance tax receipts will continue to increase significantly over the rest of the decade, making estate planning a growing concern for many clients.<\/p>\n\n\n\n Established exemptions remain a cornerstone of inheritance tax planning. The \u00a33,000 annual gifting allowance, small gifts exemption and normal expenditure out of income exemption can all help limit estate growth when used regularly.<\/p>\n\n\n\n Gifts made from surplus income can be particularly effective, as they fall outside the estate immediately if structured correctly. In practice, these strategies are often combined with life assurance written in trust to provide liquidity for future liabilities.<\/p>\n\n\n\n Lifetime gifting decisions are increasingly shaped by the interaction between inheritance tax and capital gains tax. While gifting assets can reduce inheritance tax exposure, it may also trigger immediate capital gains tax if the asset has appreciated.<\/p>\n\n\n\n By contrast, assets passed on death benefit from a capital gains tax uplift, effectively resetting their value for beneficiaries. This trade\u2011off means gifting decisions are rarely straightforward and need to be considered within a broader planning context.<\/p>\n\n\n\n Tax efficiency is only one factor in inheritance planning. Client comfort with giving up control often shapes the strategy. While outright gifts may be appropriate where affordability is clear, trusts can offer greater flexibility in how assets are ultimately distributed, although bear in mind they bring their own tax and administrative considerations.<\/p>\n\n\n\n Recent changes to Business Relief are also altering the estate planning landscape. From April 2026, new caps and reduced rates of relief mean advisers must reassess the balance between potential tax savings, investment risk and access to capital.<\/p>\n\n\n\n Across savings, pensions and estate planning, the common theme is integration. Lower allowances, frozen thresholds and evolving rules mean that decisions in one area increasingly affect outcomes elsewhere.<\/p>\n\n\n\n Rather than seeking complex solutions, effective financial planning in 2026 often comes down to applying familiar tools earlier, sequencing decisions carefully and revisiting strategies as circumstances change. Professional advice plays a critical role in navigating this environment, helping clients move forward with clarity and confidence despite ongoing uncertainty.<\/p>\n\n\n\n <\/p>\n\n\n\n Get in touch<\/strong><\/p>\n\n\n\n If you’d like to find out more about Wealthtime or speak to one of our team, simply get in touch below.<\/p>\n\n\n\nThe renewed importance of tax efficient wrappers<\/strong><\/h4>\n\n\n\n
Pension Planning After the Lifetime Allowance<\/strong><\/strong><\/strong><\/h4>\n\n\n\n
Managing contributions and allowances<\/strong><\/strong><\/strong><\/h4>\n\n\n\n
Tax\u2011free cash and legacy considerations<\/strong><\/strong><\/strong><\/h4>\n\n\n\n
Inheritance Tax Planning in an Era of Frozen Thresholds<\/strong><\/strong><\/strong><\/strong><\/h4>\n\n\n\n
Balancing inheritance and capital gains tax<\/strong><\/strong><\/strong><\/strong><\/strong><\/h4>\n\n\n\n
Bringing it all together<\/strong><\/strong><\/strong><\/strong><\/strong><\/h4>\n\n\n\n