Most of us face being taxed on our income, our capital gains, and in some circumstances the value of our estate when we die.
Taxation can be very complicated and the rules, reliefs and allowances often change, so it is worth obtaining a clear grasp of how these taxes work by discussing with a professional adviser the most efficient way to arrange your finances.
An expert will be able to help you plan your taxes in advance, and come up with effective strategies that will use the lawful reliefs and allowances to minimise the amount you have to pay.
The income tax Personal Allowance for the year 2025/2026 is £12,570 (2024/2025 was also £12,570). If your total income is less than this during the tax year, you have no tax to pay.
In the tax year 2025/2026, an individual’s CGT allowance is £3000.
This means you do not have to pay tax on gains from buying and selling shares or other investments during the tax year up to that amount. You do not normally have to pay tax on any gain you make when you sell your main residence.
The government levies tax on the value of a person’s estate, if their estate is worth more than the Nil Rate Band. The IHT ‘Nil Rate Band’ (NRB) is currently £325,000 (2025/2026) and many people are still getting caught in the trap of property inheritance tax as the threshold has not kept pace with the inflation of property prices, and so is affecting more and more people.
There is also an additional ‘main residence’ allowance (‘Property Nil Rate Band’ (PNRB)) which applies if a person’s home is given to their children (including adopted, foster or stepchildren), surviving husband or wife, or grandchildren. This is set at £175,000 (2025/2026) and is added to the IHT threshold providing a total allowance of £500,000 (2025/2026).
