With the tax year now well underway, summer presents an ideal moment to pause, reflect and ensure your financial arrangements are working as hard as they should. 

A mid-year check offers a valuable opportunity to fine-tune your planning and secure any tax-efficient advantages still available before the upcoming 2026 tax year.

At Matthew Douglas, we always remind our clients that tax efficiency is not a one-off task. Quite the opposite: it is something that requires regular attention, particularly as legislation evolves and personal circumstances shift. When was the last time you took stock of your assets and options?

Revisit your income strategy

If you have variable or multiple income streams, it is important to assess how your earnings are being drawn and taxed. The way you receive income, whether through salary, dividends, rental income or pensions, can significantly affect your tax exposure.

Are you taking advantage of the £500 annual dividend allowance? Is it possible to redistribute income across family members to reduce your overall bill? These are entirely valid questions worth answering now, while there is time to adjust course.

Use your ISA and pension allowances

As ever, ISAs remain one of the simplest ways to protect savings and investments from tax. The annual ISA allowance of £20,000 can be split across cash ISAs, stocks and shares ISAs and innovative finance ISAs. Contributions made early in the tax year benefit from a longer period of tax-free growth, making mid-year a perfect time to top up.

According to official HMRC data, more than 12.5 million adults opted into tax-friendly ISAs in 2022–23, totalling over £72 billion. With such widespread use, it is worth ensuring your allowances are being used as fully and efficiently as possible.

Likewise, pensions continue to offer generous tax relief. Contributions within your annual allowance not only reduce taxable income but also support long-term growth in a tax-sheltered environment. The current annual allowance stands at £60,000, although this may be lower depending on income level.

Explore capital gains and inheritance planning

Mid-year is also a smart time to consider any capital gains you may realise before year-end. The annual Capital Gains Tax (CGT) exemption has been drastically reduced in recent years, from £12,300 in 2022–23 to just £3,000 in 2025-6. At the same time, CGT rates increased in October 2024, now standing at 18% for basic rate taxpayers and 24% for higher rate payers. These changes make it more important than ever to plan ahead and to be aware of your unique circumstances. 

One strategy to consider is the use of “Bed and ISA” arrangements, where assets are sold and repurchased within an ISA wrapper to shield future gains. Contact us directly to discuss this in more detail.

For those thinking longer term, inheritance tax (IHT) planning is also key. The nil-rate band has been frozen at £325,000 since 2009 and is expected to remain in place until at least 2028. With the residence nil-rate band included, a married couple can pass on up to £1 million tax-free. However, be wary as rising property values mean that more estates are now falling into the IHT net each and every year. A mid-year review allows for timely consideration of gifting allowances, trusts or other estate planning strategies.

Take advantage of reliefs and allowances

The UK tax system contains a number of reliefs and allowances which are often overlooked. These include the marriage allowance, rent-a-room relief and the personal savings allowance. While individually somewhat modest in scope, collectively, these can make a meaningful difference to the total tax paid over the course of the year.

Have you claimed all the reliefs you are eligible for? Has your situation changed in a way that opens new opportunities? A mid-year check is the moment to find out.

Let’s talk

Tax efficiency is not about taking shortcuts. It is about using the tools available to you, legally and carefully, to keep more of what you earn and grow your wealth with purpose and intent.

If you would like help assessing your current arrangements or simply want a second opinion, our award-winning advisers at Matthew Douglas are always happy to speak with you. Financial peace of mind often begins with a conversation; get in touch today.