What you should know about tax advice

Tax advice in the UK is all about helping individuals understand and manage their personal tax responsibilities. Whether you’re just starting out in your career, managing multiple income streams, or earning at the highest levels, knowing how tax rules work can make a real difference to your financial wellbeing.

Understanding the UK’s tax system (like how allowances, reliefs, and different types of tax apply) may mean you make more informed decisions, help avoid costly mistakes, and plan with greater confidence.

Professional tax advisers play a key role in this process. They can help you navigate tricky situations, keep up with changing rules, and spot opportunities to optimise your finances whether that’s through pension contributions, charitable giving, or smart estate planning. 

Getting timely, professional tax advice could help you make confident decisions well before any deadlines sneak up, which may mean less stress and more money saved.

What is the UK tax year?

The UK tax year runs from 6 April to 5 April. HMRC uses this 12‑month window to check your income and collect the right tax.

Many allowances work on a per-tax-year basis, such as your ISA allowance. If you don’t use it by 5 April, you can’t carry any unused amount into the next tax year. Rather, your new allowance starts on 6 April.

How tax year‑end planning can help

Year‑end planning may help you:  

• use your annual allowances - pay money into your ISA during the current UK tax year, so it counts against this year’s ISA limit.
• claim reliefs you’re due - if you give to charity with Gift Aid, higher‑rate taxpayers can claim extra relief through Self Assessment.
• manage investment gains- you only pay Capital Gains Tax (CGT) on profits made above your yearly tax‑free amount. If you’ve made losses, you can take those off first, so choosing when to sell can help to reduce the tax you pay. ^{Footnote [1]}
• keep an eye on “payments on account” – for those using Self Assessment, these are two advance payments towards next year’s Self Assessment bill (you usually pay them on 31 January and 31 July). If you think you’ll earn less this year, you can ask HMRC to reduce these advance payments. But it’s worth noting that if you cut them too much and later owe more than you paid, HMRC will add interest to the shortfall. ^{Footnote [2]}   

Understanding the different types of tax can help you make informed decisions about your money and your future. Two of the most important taxes for individuals are inheritance tax (IHT) and capital gains tax (CGT).

Inheritance tax thresholds and exemptions

Inheritance Tax (IHT) is a tax on the estate (property, money, and possessions) of someone who has died. The standard tax-free threshold is £325,000. If your estate is worth less than this, there’s no IHT to pay. If you leave your home to your children or grandchildren, your threshold can increase to £500,000. And if you’re married or in a civil partnership, any unused threshold can be transferred to your partner, potentially doubling the tax-free amount to £1 million.^{Footnote [3]}

Anything you leave to your spouse, civil partner, or a UK-registered charity is exempt from IHT. If you leave at least 10% of your net estate to charity, the tax rate on the rest drops from 40% to 36%.

Check out our article to learn more about what inheritance tax is and how it works.

How gifting and estate planning can reduce IHT

Gifting may be a powerful way to reduce the value of your estate and lower your IHT bill. You can give away up to £3,000 each tax year without it counting towards your estate (this is called the annual exemption), and you can make small gifts of up to £250 to as many people as you like. Gifts to your spouse or civil partner are always exempt, as long as you both live in the UK permanently.

If you give away assets and live for seven years after making the gift, those gifts are usually free from IHT. If you die within seven years, the gifts may be taxed, but ‘taper relief’ can reduce the tax bill depending on how long you survive after making the gift.

Check out our article to explore more on gifting in the UK.

Estate planning (like making a will, using trusts, or seeking professional advice) can help you make the most of these exemptions and reliefs, helping to make sure that more of your wealth goes to your loved ones.

To learn more, explore our article about helping you with estate planning.

Capital gains tax

Capital Gains Tax (CGT) is a tax on the profit you make when you sell or ‘dispose of’ something that’s increased in value, such as property (not your main home), shares (outside ISAs or pensions), or other valuable assets.^{Footnote [4]}

You only pay CGT on the gain, not the total sale price. For example, if you bought shares for £5,000 and sold them for £25,000, your gain is £20,000. Some assets are tax-free, like your main home (if you qualify for Private Residence Relief), ISAs, and gifts to your spouse or charity.

To learn more, check out our article: What is capital gains tax? And if you’re curious whether you’ll have CGT to pay, explore our Capital Gains Tax calculator.

Using annual exemptions and offsetting losses

You can also use the annual exemption (currenly £3,000 for individuals) to offset the amount of CGT you have to pay, but if you make a loss when selling an asset, you can use that loss to reduce your gains for the same tax year. If you still have losses left over, you can carry them forward to offset gains in future years, but you can’t carry forward unused annual exemptions.

Let’s say you sold some shares and made a gain of £2,000. Later in the same tax year, you sold other shares and made a loss of £1,500. You can use that loss to reduce your gain, so you only pay tax on £500 (£2,000 minus £1,500). The £500 is only taxable if there is no available annual exemption.

If your losses are bigger than your gains, for example, you made £2,000 in gains but £3,000 in losses in the same tax year, you wouldn't pay any capital gains tax. Plus, you can carry the extra £1,000 loss forward to offset gains in future tax years. However, if you don’t use your annual tax-free allowance (the annual exemption), you can’t carry that forward - it’s use it or lose it each year.

Depending on your personal circumstances and financial goals, getting tax advice may be a positive next step for your financial future. And always keep in mind that your tax treatment depends on your individual circumstances as well as tax rules, which are subject to change.

When might I need tax advice?

There may be some moments when expert tax advice can help you make the most of your money. A few to consider include: 

1. Facing complex financial changes: If you’re starting a new business, receiving a windfall, or dealing with redundancy pay, a tax adviser can help you understand the tax implications and make sure you’re not missing out on valuable reliefs or allowances.
2. Managing multiple income sources: If you earn money from more than one job, have rental income, or receive dividends, tax rules can get complicated. An adviser can help you keep everything organised and ensure you’re paying the right amount.
3. Making big financial decisions: Whether you’re planning to buy or sell property, invest in shares, or transfer assets, professional advice can help you structure these moves in a tax-efficient way, so you keep more of your gains and avoid unexpected bills.
4. Preparing for the future: If you’re thinking about passing on wealth to family or supporting charities, a tax adviser can guide you through inheritance tax planning, gifting rules, and setting up trusts, helping to make sure your wishes are carried out smoothly.
5. Responding to HMRC queries: If you ever receive a letter or enquiry from HMRC, having an adviser on your side can help you respond confidently and correctly, reducing stress and the risk of penalties.

Tax rules change regularly, and everyone’s situation is unique. Getting tailored advice means you can make informed choices, stay compliant, and feel confident about your financial future.

If you're unsure, our Aviva Wealth Compass may be able to help you navigate your next steps. We offer different types of support at Aviva, from handy calculators for things like Inheritance Tax and pensions, to retirement planning and getting expert financial advice.

When shouldn’t I need tax advice?

If you are employed and your income is modest, you typically don’t need formal tax advice because your employer deducts Income Tax and National Insurance through PAYE (Pay As You Earn). Most employees with straightforward income (salary only, no large investments or complex benefits) don’t need to file a Self Assessment tax return.

Also, you can manage basic checks yourself via HMRC’s Personal Tax Account, which lets you:

• check your tax code and Income Tax estimate
• claim refunds or update allowances
• review benefits, like company car or medical insurance.

If you’re earning a high income, there are some important tax rules to know, especially if your earnings go above £100,000.

Everyone gets a Personal Allowance, which is the amount you can earn before paying Income Tax. For most people, that’s £12,570. But if your income goes over £100,000, your Personal Allowance starts to shrink. For every £2 you earn above £100,000, you lose £1 of your allowance. By the time your income reaches £125,140, your Personal Allowance is gone, and you’ll pay tax on everything you earn.

This means that the effective tax rate on income between £100,000 and £125,140 is much higher, because you’re not just paying more tax, you’re also losing your tax-free chunk.

Once your income goes over £125,140, you enter the additional-rate tax band. This means you’ll pay 45% Income Tax on anything you earn above that level. It’s the highest rate of Income Tax in the UK, so it’s worth knowing where you stand.

Strategies to reduce your taxable income

There are ways to bring your taxable income down. For example, paying into your pension can reduce your adjusted net income, which might help you keep more of your Personal Allowance and pay less tax overall. Pension contributions get tax relief, so you’re saving for the future and cutting your tax bill at the same time.

Giving to charity through Gift Aid also reduces your adjusted net income. If you’re a higher-rate taxpayer, you can claim extra relief through your Self Assessment tax return. For some, having a tax adviser to navigate these options can make a big difference by helping you spot opportunities to save, avoid costly mistakes, and make sure every claim is supported with appropriate evidence.

Getting the right tax advice can make a big difference to your financial wellbeing. At Aviva, our financial advice services can help you plan your taxes as part of a broader wealth strategy, so you’re not just thinking about tax, but about your whole financial future.

Tax advice in the UK is offered by a range of professionals, including chartered tax advisers, accountants, and financial planners. Look for advisers who are members of recognised bodies, such as the Chartered Institute of Taxation (CIOT), the Association of Chartered Certified Accountants (ACCA), or the Personal Finance Society (PFS). You can check their credentials on the relevant professional body’s website.

Aviva’s advisers can work with you to build a tailored plan, ensuring your tax strategy fits your wider financial goals and keeps you on track for the future.