With changes to income tax rates expected from 6 April 2027, individuals may wish to review their financial affairs to determine whether there are opportunities to improve tax efficiency before the end of the 2026/27 tax year.
Key areas to consider include:
- Review the timing of savings income receipts
Where flexibility exists, consider whether interest-bearing accounts or other investments can be structured so that income is received before 6 April 2027. Depending on your circumstances, this may result in income being taxed at current income rates as opposed to an extra 4% from 2027/28. - Assess the timing of tax-deductible rental expenditure
Landlords may wish to review planned repairs and maintenance expenditure and, if feasible, defer works beyond 6 April 2027. - Ensure income is taxed on the beneficial owner
Married couples and civil partners should review the ownership of savings and investments and, where appropriate, consider whether assets are held in the most tax-efficient manner. Any transfers should reflect genuine beneficial ownership and take account of wider legal and financial considerations. - Maximise tax-efficient allowances
Consider making full use of available ISA allowances, as income and gains arising within an ISA are free from UK income tax and capital gains tax.
Act Before the end of this Tax Year
The period before 6 April 2027 provides an opportunity to review your tax position and consider whether any planning steps are appropriate. As tax outcomes depend on individual circumstances, professional advice should be sought before implementing any strategy – read more here.
If you would like to discuss how the forthcoming changes may affect you, please contact us for tailored advice.
Your questions answered
Why should I review my savings and investment income before 6 April 2027?
With income tax rates expected to increase from 6 April 2027, it may be beneficial to review when income from savings and investments is received. If you have flexibility over the timing of interest or investment income, bringing receipts forward into the 2026/27 tax year could mean that income is taxed at current rates rather than potentially higher rates from 2027/28. As the impact will vary depending on individual circumstances, professional advice is recommended before making any changes.
What should landlords consider ahead of the 2027 income tax changes?
Landlords may wish to review the timing of planned repairs and maintenance expenditure. In some cases, it may be advantageous to defer certain tax-deductible costs until after 6 April 2027. Careful planning can help ensure that relief for expenditure is claimed in the most tax-efficient tax year, taking into account the expected changes to income tax rates and your wider financial position.
How can married couples and civil partners prepare for the 2027 income tax changes?
Married couples and civil partners should consider reviewing the ownership of savings and investment assets to ensure income is being taxed on the beneficial owner in the most tax-efficient way. Where appropriate, transferring assets between spouses or civil partners may help make better use of available tax bands and allowances. Any changes should reflect genuine beneficial ownership and be considered alongside legal, financial and estate planning implications. Additionally, making full use of ISA allowances can help shelter future income and gains from tax.
