Article last updated 24 March 2026.
Tax year end is an important moment for business owners — not just in terms of financial planning strategy, but in making sure allowances aren’t wasted and checking whether known 2026/27 changes should shape decisions either side of the year end.
The information in this article is based on our understanding of HMRC tax rules in the UK. Tax treatment depends on individual circumstances which could change.
Seek advice early
These areas cut across tax, legal paper work, valuation and cashflow. Joined-up advice is better than a rushed fix later.
Below are the allowances that often matter most to business owners because they reset each tax year and can't usually be "recovered" later.
Why it matters: Dividend tax increases from April 2026 for basic and higher rate taxpayers, and dividend and CGT allowances have already been reduced significantly. The value of tax-free wrappers has therefore increased. ISAs can also help separate “family capital” from business risk, particularly where wealth is concentrated in the company.
How we can help
If most of your wealth is tied up in your business and you would like to build more capital outside it, we can help structure ISA funding alongside your wider investment plan.
Why it matters: For many owners, pension contributions remain one of the largest legitimate levers for improving after-tax outcomes. For owner-managed businesses, employer contributions can be especially attractive. However, structure, timing and documentation matter, so your accountant should be aligned on the corporation tax treatment and payment date.
How we can help
If you are unsure how much headroom remains or how employer contributions interact with your wider plans, we can work with your accountant to confirm what is supportable.
Business-owners lens:
Why it matters: Where dividend timing is genuinely controllable and properly documented, declaring a dividend before 6 April 2026, if it was going to be taken anyway, may create a modest saving compared with taking the same dividend after 6 April for basic or higher rate taxpayers.
Two practical cautions (where things go wrong):
Couples: Where spouses or civil partners are shareholders, it is worth checking whether each person is using their own dividend allowance and lower rate bands. In some cases, transferring or issuing shares to a lower-rate taxpayer may be considered. This must be consistent with ownership, control and genuine family intent, and professional advice is essential. Capital gains tax implications may also arise.
How we can help
If you would like clarity on whether a dividend before 5 April is commercially coherent and properly evidenced, we can review reserves, documentation and personal tax bands with your adviser team.
Why it matters: The exemption is modest, but incremental “maintenance” actions can reduce the eventual chargeable gain, particularly where you also have:
• capital losses that could be used strategically,
• assets you were planning to dispose of anyway, or
• genuine spouse or civil partner planning that fits the wider family position.
Practical caution: avoid simplistic “sell and buy back next day” thinking. Anti avoidance rules can apply and may render such actions ineffective.
How we can help
If you hold investment assets alongside your business interests, we can help coordinate gains, losses and spouse planning to avoid unintended outcomes.
Why it matters: Nil-rate bands are frozen until 6 April 2031, and business asset values often grow faster than allowances. Business Relief remains important, but from 6 April 2026 inheritance tax may arise on business interests above the new £2.5 million allowance for 100% relief. Consistent use of gifting exemptions is rarely dramatic, but it often makes later planning more manageable.
Owner reality check: Gifting is not only a tax decision; it is a control and governance decision. Tax-driven action is most compelling when assets will not qualify for full relief post 5 April 2026, or when transfers of business property exceeding the available allowances are being considered for trust structuring before that date.
How we can help
If gifting is part of your long-term plan, we can help ensure it is structured, documented and aligned with your wider estate strategy.
These confirmed April 2026 changes are most likely to influence "do we act before 5 April?" conversations.
From 6 April 2026, dividend tax increases by 2 percentage points for the ordinary rate (10.75% from 8.75%) and the upper rate (35.75% from 33.75%). The additional rate remains unchanged.
What it means: For owners in the basic or higher rate bands who have genuine flexibility over dividend timing, and where company law, documentation and distributable reserves support it, bringing forward dividends may be appropriate. Any decision must be commercially coherent and consistent with your overall tax position.
How we can help: We can model the difference and confirm whether action is proportionate to the potential saving.
For qualifying disposals:
• the BADR rate is 14% for disposals made on/after 6 April 2025, and
• it increases to 18% for disposals made on/after 6 April 2026.
The lifetime limit remains £1 million of qualifying gains.
What it means: If a sale or exit is plausible, BADR discussions should not be left to the final weeks. Deal timetables slip frequently, and “we will complete just before 5 April” is rarely realistic.
How we can help: If an exit is even a medium-term possibility, we can work alongside your corporate advisers to sense-check timing risk and tax exposure early.
From 6 April 2026, Venture Capital Trust income tax relief for new subscriptions reduces from 30% to 20%.
What it means: For investors already considering VCTs, and only where suitable, 2025/26 is the final year with 30% upfront relief. VCTs are high risk and illiquid by design. Relief depends on meeting conditions, including holding shares for at least five years.
How we can help: If VCTs form part of your tax planning, we can assess suitability and ensure risk, liquidity and relief conditions are fully understood.
From 6 April 2026, reforms to Agricultural Property Relief and Business Property Relief take effect. Key points include:
What it means: Where Business Relief is central to your estate planning, particularly above the new allowance, ownership structure, documentation and liquidity planning should be aligned well before March. This is rarely a last-minute tax issue; it is a valuation, governance and funding issue.
For a detailed explanation, see our planning for the new £2.5 million Business Relief limit article.
How we can help: If Business Relief exposure is material in your estate, we can help quantify potential inheritance tax exposure under the new regime and coordinate next steps with your legal and tax advisers.
Example 1 - dividend rate rise:
If a £50,000 dividend is fully taxed at the higher dividend rate, a 2 percentage point increase costs an extra £1,000 of tax (£50,000 × 2%) if taken after 6 April 2026 rather than before, all else equal.
Example - BADR step up:
A £1,000,000 qualifying gain taxed at 14% is £140,000 of CGT.
The same gain taxed at 18% results in £180,000 of CGT.
That is £40,000 more tax if the disposal occurs on or after 6 April 2026. Individual circumstances and deal mechanics will affect the outcome.
• Director shareholders who can control dividend timing.
• Anyone considering a business sale in light of the BADR rate change.
• Families with material Business Relief exposure above the new £2.5 million allowance from April 2026.
How we can help: If you would value a short review to prioritise which of these points are genuinely relevant, we can provide a focused pre-year-end discussion.
Work out what's relevant and what needs lead time
Some decisions take longer than people expect.
Dividend declarations need distributable reserves confirmed and board process in place. Pension contributions need headroom checks and provider processing time. Use this window to triage which actions genuinely apply to your situation and identify anything with a paperwork tail.
Put agreed actions in place and document them properly.
Make pension contributions, subscribe to ISAs, declare any dividends and complete any planned gifts before 5 April.
Documentation matters as much as timing: board minutes, dividend vouchers and gift records all need to exist before the deadline, not be reconstructed after it.
New tax year - reset allowances, new rules in effect.
Fresh allowances open from 6 April and the new rates and rules are now live: higher dividend tax for basic and higher rate taxpayers, Business Asset Disposal relief at 18% and the revised Business Relief regime.
A short review at the start of the year, rather than the end, is usually the more comfortable way to start ahead of it.