1. The Pension Power Play: Tax Relief and Carry Forward

Pensions offer the most generous tax benefits of any saving vehicle, often receiving tax relief at your highest marginal rate (20%, 40%, or 45%). However, these contributions are capped, making early planning essential.

A. Maximise the Annual Allowance (AA)

The standard Annual Allowance (AA) is £60,000 for the 2025/2026 tax year. However, this figure can be significantly lower for high earners (via the Tapered Annual Allowance) or for those who have already started drawing down their pension savings (via the Money Purchase Annual Allowance (MPAA)).

B. The Carry Forward Opportunity

If you have not used your full £60,000 AA this year, you can potentially carry forward unused allowance from the previous three tax years (2024/2025, 2023/2024, and 2022/2023).

• Why Act Now: Calculating available carry forward requires precise records of earnings and contributions over four separate tax years—a complex task that requires time. Starting this calculation in November allows you to identify your maximum contribution limit and spread out the required funding (which can be a substantial six-figure sum) over several months.
• Budget Concern: Given the Chancellor’s need for revenue, there is perpetual speculation about future limits or changes to the generosity of tax relief for higher-rate taxpayers. Maximising contributions now locks in the current rules.

2. Shielding Gains: The ISA and CGT Exemptions

Two key allowances protect your wealth from future taxation: the Individual Savings Account (ISA) and the Capital Gains Tax (CGT) Annual Exempt Amount (AEA).

A. The £20,000 ISA Shield

Every UK adult has a £20,000 ISA allowance for the current tax year. Any gains made within a Stocks & Shares ISA, or interest earned in a Cash ISA, are permanently free from UK Income Tax, Dividend Tax, and Capital Gains Tax.

• The Use-It-or-Lose-It Rule: Unlike a pension, the ISA allowance cannot be carried forward. If you use only £10,000 this year, the remaining £10,000 is lost forever.
• Why Fund Now: Funding your ISA early in November means your money benefits from almost five additional months of tax-free growth compared to waiting until the end of March. This early compounding effect can significantly boost your long-term wealth.

B. The Capital Gains Tax (CGT) Exemption

The CGT Annual Exempt Amount (AEA) for 2025/2026 is £3,000. This is the profit you can realise from selling non-ISA assets (like shares or second property) tax-free.

• The Axe: The AEA has been repeatedly cut from its peak of over £12,000, and there is strong speculation that the Chancellor could reduce it again, possibly to as low as £1,000, in the November Budget.
• CGT Harvesting: November is the time to identify assets that have appreciated in value and sell just enough to utilise the current £3,000 allowance. This “harvesting” locks in tax-free profits. You can then repurchase the same asset after 30 days (to avoid ‘bed and breakfasting’ rules), resetting the base cost for future gains at a higher level, which is a powerful long-term tax mitigation strategy.

Risk Warning: Selling assets can trigger tax implications (CGT or Income Tax) if done incorrectly. It is vital to accurately calculate your total realised gains for the year before selling, especially when engaging in CGT harvesting.

3. The IHT Head Start: Gifting and Allowances

Inheritance Tax (IHT) planning is a decades-long process, but November is a key time to initiate gifting plans for the current tax year.

• The Annual Exemption: Every UK person can gift up to £3,000 per tax year completely IHT-free, known as the Annual Exemption. This allowance can be carried forward for one year only, meaning you could potentially gift £6,000 now if you didn’t use it last year.
• Potentially Exempt Transfers (PETs): Larger gifts are known as PETs. These only fall outside your estate for IHT purposes if you survive the gift by seven years.
• Budget Alert: As noted in the Budget preview (Suggestion 1), there is persistent rumour that the Chancellor may seek to extend the seven-year PET rule to ten years or introduce a lifetime cap on gifting. If you intend to make a substantial PET, doing so before the November Budget could lock in the current, more favourable seven-year clock.

4. Other Year-End Planning Items

• Spousal Transfers: Review assets held in your name versus your spouse’s name. You can transfer assets (shares, investment funds) between spouses tax-free to ensure that each person utilises their CGT AEA, Income Tax Personal Allowance, and Dividend Allowance.
• Dividend Allowance: The tax-free Dividend Allowance is currently £500. Ensure you use this low allowance wisely by holding dividend-paying stocks outside an ISA and within a General Investment Account up to this limit.

Venture Capital Trusts (VCTs) / Enterprise Investment Schemes (EIS): These investments offer generous tax incentives (like 30% Income Tax relief), but they are high-risk and require significant processing time. If considering these, start the application process in November, as the funds often close early or struggle with high demand near the tax year-end.