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What is tax year end and why is it important for investors? 

The UK tax year (or fiscal year) begins on 6 April each year, and ends on 5 April the following year. It is the 12-month period used by the UK government to calculate how much tax individuals owe on their income and gains.

The UK’s tax year runs at a different time compared to many other countries (which align their tax years to the traditional January to December calendar). 

At the start of the tax year, many of your annual tax allowances reset, including the amount you can contribute to an Individual Savings Account (ISA) or pension, as well as tax-free allowances for dividends, interest and capital gains. It can therefore be an opportunity to take advantage of tax-efficient wrappers and potential government bonuses on some investment and savings products.

Using your allowances at the start of the tax year can mean you start to feed money into the market earlier, and can make it simpler when the next tax year arrives to decide what to do with your new allowance.

This makes tax year end an important time for investors. As the end of the tax year draws near, it's a period in which you can make the most of your remaining annual allowances, the benefits they come with (such as tax-efficient returns and, in some cases, government bonuses) and the positive impact they can have on your long-term investments.  

Remember, as with all investing, your capital may be at risk. Tax rules vary by individual status and may change.

What happens at the end of the tax year? 

After the 5 April deadline, the new tax year begins and your allowances reset. For ISAs, any unused portion of your allowance can’t be used in the new tax year. However, you could continue investing into the same ISAs from last year, and open new ISAs as well, using your new annual allowances. 

We have a detailed guide on tax efficient investing, and your annual allowances, here.

If you have money that you are planning on putting away into an ISA, Lifetime ISA (LISA) or Junior ISA (JISA), you may want to do this before the deadline, as the allowances for these products do not roll into the next tax year.

Pensions are the exception to this, where you may be able to carry forward some of your unused pension allowance into the new tax year, subject to the following conditions:

  • Only allowances from the three previous tax years are available
  • You must have been a member of a registered pension scheme in those years
  • You must also use the full allowance for the current tax year first, and have relevant UK earnings that match the amount you wish to contribute.

How does tax year end differ if you’re self-employed?  

If you are self-employed, you’ll need to file an online Self Assessment tax return and pay any tax you owe by 31 January the following tax year. Basic rate tax relief is applied by your pension provider. You can also claim tax relief on money you put into a private pension (via your Self Assessment tax return) for 20% of any amount of income you have paid 40% tax on, and 25% of any amount of income you have paid 45% tax on. Working out your tax liability when you're self-employed can be difficult, and you may wish to obtain personalised tax advice from a qualified adviser. J.P. Morgan Personal Investing does not provide tax advice.

Your entitlement to the £20,000 annual ISA allowance doesn’t change.  

I’m still not sure about tax year end  

Our team of experts are on hand to guide you on how you could make the most of tax-efficient investments as you approach the end of the tax year, and any other questions you might have.

Whether you're a new investor or you've been putting your money to work for many years, it's good to know:

What taxes do UK investors pay?

If you invest in ISAs and pensions using available annual allowances, returns are not generally subject to tax. If you invest in a General Investment Account (GIA) or elsewhere, you could be subject to Capital Gains Tax or tax on income generated through dividends and interest if you exceed the annual tax-free allowances (see below for more information). How much tax you might pay depends which wrapper you are using and your personal circumstances.

Capital Gains Tax (CGT) 

CGT is the tax you are required to pay when you sell or ‘dispose’ of an asset for a profit, or 'gain'. A capital gain is, broadly speaking, the difference between the price you paid for something and the price you sell it for. The tax you pay is on the gain only – not the total sale price. Everyone has an annual CGT exempt amount, and you can make capital gains up to this threshold without having to pay CGT. For the 2025/26 tax year, the annual exempt amount is £3,000 (or £1,500 for trusts). If you invest outside of an ISA or pension, or exceed your annual exempt amount for the year, you could be subject to CGT on any capital gains you make.

As of 6 April 2025, the rate of CGT for basic rate taxpayers is 18% on gains on chargeable assets (for example, shares not held in an ISA). For higher or additional rate taxpayers, the rate of CGT on gains on chargeable assets is 24%.

Tax on dividends 

You do not pay tax on any dividend income that falls within your personal allowance or your dividend allowance (note, dividend allowance is in addition to your personal allowance). As with CGT above, outside of a tax wrapper like an ISA or a pension, dividends may be subject to tax. 

You can receive dividends up to the annual dividend allowance without having to pay tax. The annual allowance for the 2025/26 tax year is £500.

How much dividend tax you pay depends on your Income Tax band. If you are a basic rate taxpayer, your dividend tax rate is 8.75%. If you’re a higher rate taxpayer, it’s 33.75%. If you’re an additional rate taxpayer, it’s 39.35%.  

Tax on savings interest 

Interest is taxed as savings income. This means the same marginal tax rates and bands apply as do for your income. 

For those who earn income of between £12,570 and £17,570, the "starting rate band" for savings interest may apply. The starting rate band covers up to a maximum of £5,000 in savings interest only. This means that if you earn an income of £12,570 (the limit below which you do not pay income tax), you may be able to earn up to £5,000 in savings interest, before you pay tax on it. The amount you can earn in savings interest without paying tax on it reduces for every pound earned over £12,570. When your income is over £17,570, the starting rate band no longer applies. 

Everyone has a personal savings allowance, which tapers based on tax bands. For basic rate earners, the personal savings allowance is £1,000. The personal savings allowance is £500 for higher rate tax payers. Additional rate tax payers have no personal savings allowance.  

Risk warning: As with all investing, your capital is at risk. The value of your portfolio can go down or up and you may get back less than you invest. ISA/JISA/LISA/Pension eligibility rules apply. With LISAs, govt withdrawal charges may apply. Seek financial advice if you're unsure if a pension is right for you. Tax rules vary by individual status and may change. This is general information, not personalised tax advice.