Key Takeaways

• The “Goldilocks” Month: February is the optimal time for planning; you still have the “luxury” of time to process paperwork, yet the April 5th deadline is close enough to identify your final income and gains.
• ISA: Use it or Lose it: Your £20,000.00  annual allowance resets on April 6th. Any unused portion cannot be carried forward.
• Pensions & Carry Forward: You can contribute up to £60,000.00 (or 100% of earnings, if lower), but February is the last chance to calculate “Carry Forward” from the 2022/23 tax year before that allowance disappears forever.
• Shrinking CGT & Dividend Allowances: With the Capital Gains Tax (CGT) exempt amount at just £3,000.00 and the Dividend Allowance at £500.00, sheltering assets in an ISA or pension is now a necessity rather than an option.
• Operational Urgency: April 5th, 2026 falls on a Sunday (Easter Sunday). This means the practical deadline for many providers will be Thursday, 2nd April. Waiting until April is a high-risk strategy.

1. Why February is the “Strategic Sweet Spot”

In financial planning, timing is everything. If you attempt to maximise your allowances on April 4th, you are at the mercy of IT systems, bank transfer limits, and postal delays.

In February, you have two critical advantages:

1. Visibility: You likely have a clear picture of your total earnings for the year, including any bonuses or dividends.
2. Agility: You have enough time to open new accounts, transfer “Bed and ISA” assets, or calculate complex pension “Carry Forward” figures without the stress of a ticking clock.

2. The ISA Deadline: Guarding Your £20,000

The Individual Savings Account (ISA) remains the “Holy Grail” of UK tax planning. Any growth or income generated inside the wrapper is entirely free from UK Income Tax and Capital Gains Tax.

Use It or Lose It

For the 2025/26 tax year, the adult ISA allowance is £20,000.00. If you only contribute £15,000.00 by April 5th, you cannot “add” that missing £5,000.00 to next year’s limit. It is gone forever.

The 2026 Dividend Trap

From April 2026, the government has announced a 2 percentage point increase in dividend tax rates for basic and higher-rate taxpayers. If you have shares held outside an ISA, your tax bill is about to rise. Moving those shares into an ISA via a “Bed and ISA” process in February allows you to shelter those future dividends before the rate hike takes effect.

3. Pensions: The Final Call for 2022/23 Carry Forward

The standard Pension Annual Allowance is £60,000.00 (or 100% of your relevant UK earnings, whichever is lower). However, many Worcester business owners and high earners are unaware of the “Carry Forward” rules.

The Three-Year Rule

You can use unused allowances from the previous three tax years to boost your contributions this year.

• The February Urgency: On April 6th, 2026, any unused allowance from the 2022/23 tax year will expire.
• The Benefit: For a higher-rate taxpayer, a £10,000.00 pension contribution effectively costs only £6,000.00 after tax relief, while moving the £10,000.00 into your retirement pot.

4. Capital Gains: Managing the £3,000.00 Threshold

Gone are the days of the £12,300 CGT allowance. For 2025/26, you can only make £3,000.00 in profit before the taxman takes a slice (18% for basic rate, 24% for higher rate on most assets).

Strategic Crystallisation

If you have a portfolio with significant gains, February is the month to “crystallise” (sell) just enough to use your £3,000.00 exemption.

• Pro Tip: If you are married or in a civil partnership, you have a combined £6,000.00 exemption. Assets can often be transferred between spouses tax-free to ensure both allowances are utilised.

5. The “Easter Sunday” Bottleneck

This is a quirk of the 2026 calendar that could catch many out.

• April 5th, 2026 is Easter Sunday.
• April 6th, 2026 (the start of the new tax year) is Easter Monday—a Bank Holiday.

Practically speaking, many financial institutions will require your funds to be cleared and instructions processed by the end of play on Thursday, 2nd April. If you wait until the “final weekend,” you may find that your bank or platform is closed for the Easter break, causing you to miss your 2025/26 allowances entirely.

6. Checklist: Your February “Action Stations”

To make the most of this 60-day window, work through this checklist: